On the morning of July 5, Samsung Electronics announced that due to continued weakness in the price and demand for memory chips, the company's second-quarter profit may fall by more than 50% year-on-year.

Samsung Electronics
Samsung Electronics

   The world’s largest smartphone manufacturer and memory chip supplier said operating profit was 6.5 trillion won ($5.5 billion), slightly higher than the industry’s estimate of 6 trillion won, but a year-on-year decrease of 56%. Sales in the second quarter were 56 trillion won, better than market expectations of 54.54 trillion won.

   Memory components used in mobile phones and corporate servers constitute Samsung’s main profitable business. Experts said that the entire semiconductor industry is undergoing a period of inventory adjustment, which has kept demand down, leading to oversupply and squeezing prices. Some people predict that the inventory of DRAM and NAND memory chips will continue to be excessive, delaying the recovery of the industry until the second half of 2020.

   In the previous quarter, Samsung’s earnings fell by approximately 60% year-on-year to 6.2 trillion won ($5.3 billion). Samsung will release its full second quarter performance report later this month.