Tech giant's 2Q profit falls 56%
Samsung Electronics saw its profit more than halve during the second quarter of this year due to weak demand for memory chips amid the lingering U.S.-China trade war.On July 6, the Seoul-based company came up with its earnings guidance for the second quarter of this year _ the firm expected its operating profit to dip to 6.5 trillion won ($5.6 billion) from 14.87 percent a year ago.The bottom line is slightly better than the market consensus of 6 trillion won but still, the tech giant suffered a 56.3-percent fall during the April-June period, according to the preliminary figures.The world’s largest manufacturer of memory chips and smartphones is likely to announce final figures at the end of the month.This marks back-to-back bad news for Samsung whose operating profit also plummeted some 60 percent to 6.2 trillion won ($5.3 billion) in the first quarter year-on-year.On a more negative note, things may worsen for Samsung during the remainder of this year.As the trade tension between the United States and China continues, the two sides struggle to find a breakthrough to weigh on the global economy and Samsung.Early this week, Japan also announced strict restrictions on exports of key high-tech materials, which Korean electronics firms use to make semiconductors and smartphones.The measure, which came due to a growing dispute between the two neighbors over wartime forced labor issues, is expected to affect Korea’s two largest firms of Samsung Electronics and SK hynix.SK hynix is the world’s second-largest memory chip maker, only trailing Samsung. Without the made-in-Japan materials, the two powerhouses are feared to face troubles in churning out semiconductor products in the not-so-distant future.Related storiesSamsung records worst profit in 10 quartersDid Samsung do ‘big bath accounting’?
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Kevin Chung
(jumphigher55@aol.com)