Samsung Q2 Profit Tipped To Halve
Samsung Electronics is forecast to report over a 50% drop in Q2 profit, citing the US trade ban on Huawei and its affect on the company’s sluggish semiconductor business.
Q2 results are set to be Samsung’s lowest in three years, with recovery not expected for several quarters.
The news comes as chip oversupply continues to hamper Samsung’s bottom line, coupled with a broader slowdown in the tech landscape.
According to Reuters, analysts forecast Q2 operating profit of US$5.14 billion – a notable 60% drop versus the same time last year.
Samsung is currently the world’s largest DRAM and NAND chip supplier, with the division historically a major cash cow – e.g. generating around two thirds of profits.
Chip prices have slumped in recent months (~25%) exacerbated by decreased demand from the United States’ Huawei trade ban.
“When there’s not many players that can buy chips instead of Huawei, then Samsung has to cut prices to sell them,” said Sangsangin Investment & Securities analyst, Jay Kim, to Reuters.
By contrast, Samsung is tipped to ship more smartphone shipments amid the Huawei ban.
According to Counterpoint Research, last year Samsung shipped 292 million handsets, whilst Huawei shipped 205 million.
The Korean giant is set to report Q2 results on Friday, for the period April to June.