Samsung Electronics said on Wednesday that there is a possibility it might delay or cut its investment in 5G technology in the wake of COVID-19 crisis.
In August, 2018 Samsung Group said it is planning to make an investment of 25 trillion won or $22 billion in artificial intelligence, 5G mobile technology, electronic components for autos, and the biopharmaceutical business in pursuit of new growth areas.
Samsung expects a decline in earnings for the three months ending in June due to the Covid-19 pandemic.
Samsung had reported revenue of 55.33 trillion won for the three months ended in March 2020.
Samsung warned sales and profits of smartphones and TVs are expected to dip significantly as COVID-19 affects demand and leads to store and plant closures globally.
Samsung said it plans to go ahead with the launch of new models for its foldable smartphones and the Galaxy Note in the latter half of the year despite uncertainties.
Apple has issued similar warnings as the economic downturn caused by the virus outbreak forces people to cut back on nonessential spending.
Samsung expects continued robust demand for its chips used in servers and PCs as more people work from home, consume streaming content and participate in online education. Samsung’s memory components are used in data centers, PCs and smartphones.
Other chipmakers SK Hynix and Intel last week posted forecast-beating first-quarter earnings, but did not provide full-year forecasts.
“Looking ahead to the second quarter, the company expects the memory business to remain solid, but overall earnings are likely to decline from the previous quarter because COVID-19 will significantly impact demand for several of its core products,” Samsung said in a statement.
Samsung reported operating profit of 6.45 trillion Korean won or almost $5.3 billion for the three months ended in March, as earnings from the memory business offset the weakness in its consumer electronics division and display business.