Samsung Electronics forecast a steep plunge in its second-quarter operating profit as the trade war between the United States and China caused havoc in global chip and smartphone markets, although one-off gains helped it beat analyst expectations.
South Korea-based Samsung is on track to post year-on-year profit declines for a third consecutive quarter, as chip prices fell because of a supply glut and American sanctions on Huawei, the Chinese telecom equipment maker and a major client of Samsung.
in a regulatory filing ahead of the release of its detailed earnings figures in late July, Samsung said that second-quarter operating profit probably fell 56 percent, to 6.5 trillion won, or $5.6 billion). Revenue is expected to have fallen 4.2 percent.
Memory chip makers, like Samsung and South Korea’s SK Hynix, are hurting as rising tariffs dampen global demand for electronics.
South Korea’s tech giants are also bearing the brunt of Japanese curbs on exports to South Korea of materials used in memory chips and smartphones, the latest flash point in a quarrel over Japan’s use of forced wartime labor.