Samsung Q2 Profit Tumbles 56% YoY
Samsung Electronics has fared a significant a 55.6% year-on-year drop in Q2 operating profit, citing falling memory chip prices.
It’s the second straight quarter Samsung’s operating profit has more than halved versus the previous year.
For the three months ending June 30, operating profit notched 6.6 trillion won (US$5.6 billion), with consolidated sales hitting 56.13 trillion won.
Despite the severe slump, Q2 results are slightly better than the company’s guidance provided earlier this month.
“The weakness and price declines in the memory chip market persisted as effects of inventory adjustments by major datacenter customers in the previous quarters continued, despite a limited recovery in demand,” claims the company in a statement.
The world’s biggest memory chip supplier notched a whopping 71% YoY drop in Q2 semiconductor operating profit to 3.4 trillion won.
Samsung claims its memory unit saw increased demand despite sluggish market conditions.
The company’s mobile business operating profit slipped 42% year-on-year to 1.56 trillion won.
The South Korean giant predicts overall mobile demand will remain weak in the second half, flagging “growing uncertainties over the global economy and trade.”
The news comes as trade tensions between Japan and South Korea continue to intensify, restricting the export of crucial smartphone components.
Samsung expects semiconductor demand to grow for the second half of the year, whilst flagging industry volatility over “increased external uncertainty.”
The company is scheduled to launch its new Note 10 series of smartphones early August, with the long-awaited release of its Galaxy Fold the month after.
The Galaxy Fold is positioned as an ultra-premium device, with its re-release following a slew of technical problems from early reviewers.