A report in Reuters says Samsung Electronics’ Q2 profit may be halved due to a substantial drop in memory chip sales. The situation is believed to be further exacerbated by Huawei’s growing woes, resulting in a likely drop in overall quarterly profit when Samsung reports its preliminary earnings on Friday. If the earnings pan out as predicted, it will be the Korean company’s lowest in nearly three years. Analysts believe Samsung will report a 60% drop in April-June operating profit at 6 trillion won ($5.14 billion).
The memory chip market is reeling from oversupply, bringing down the prices in an already slowing market. Analysts believe Samsung’s recovery is at least a few quarters away. Though the Korean tech giant stands to gain in the global smartphone market where Huawei is currently the second largest vendor, the likely gains are no match to the erosion of profits from its semiconductor business which accounts for nearly two-thirds of the company’s overall profit.
