Samsung’s profit drops by more than 50 percent due to falling memory chip priceschip

Samsung made more than half the profit in the second quarter of this year than in the same period last year. This is mainly due to the falling prices of memory chips, says the manufacturer. The smartphone division is also struggling.

Samsung’s second-quarter operating profit came in at 6.6 trillion Korean won, Samsung reports. That is about 5 billion euros. That is a decrease of 55.61 percent compared to the same period in the previous year. The turnover amounted to approximately 42.6 billion euros. The result was slightly better than Samsung had predicted at the beginning of the month.

Samsung attributes the declining numbers mainly to the memory chip market. The falling prices are a problem for the company, although the demand for the products is slightly higher. This decrease is mainly due to data centers buying less expensive chips. That situation would only improve in the course of 2020, Samsung predicts.

In the segment that includes Samsung smartphones, the operating profit fell by about 42 percent to 1.18 billion euros. This was mainly because the Galaxy S10 did not sell as well as thought and fewer premium products are generally purchased. Samsung says the release of the foldable Galaxy Fold phone later this year and the upcoming Galaxy Note 10 will allow for better results. In addition, the company will also introduce a number of new A-series phones in the second half of the year, which should boost profits.

The company is not only troubled by disappointing sales, but also by international problems. A trade dispute between Japan and homeland South Korea is an obstacle as Japan has imposed export restrictions on materials used in smartphones and chips. The company says it is preparing for that problem to continue for a long time.