Samsung head office/Courtesy of Samsung Electronics

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.

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