Samsung Electronics, the world’s largest smartphone and memory chip maker, saw net profits slump by more than half in the third quarter, it said Thursday, amid a continued downturn in the global chip market.
Net profits in the three months to June were 6.29 trillion won ($5.40 billion), it said in a statement — down 52 percent year-on-year.
“Earnings from the Memory Business slumped significantly year-on-year as memory chip prices continued its downward trend,” the company said.
The firm is the flagship subsidiary of the giant Samsung Group, by far the largest of the family-controlled conglomerates known as “chaebols” that dominate business in the world’s 11th-largest economy.
But in recent months it has been battered by falling memory chip prices as global supply increases.
Samsung is also battling challenges from the US-China trade war and touch export restrictions imposed by Tokyo on key supplies amid a dispute with Seoul over wartime forced labour.
Operating profits plunged 55.7 percent to 7.8 trillion won in third quarter, the firm said, while sales fell 5.3 percent to 62 trillion won.
The South Korean tech titan leads the global smartphone market with a 23 percent share, trailed by Chinese competitors Huawei and Oppo, with Apple in fourth place, according to sales tracker IHS Markit.
The premium smartphone market has grown fiercely competitive and overall sales have cooled as a lack of major innovation has caused people to wait longer before upgrading to new models.
But Samsung said phone profits had been boosted by strong sales of the Galaxy Note 10 and its A series devices, along with bigger margins for mass-market models.
“The business also expanded its 5G product offerings and launched the Galaxy Fold, demonstrating Samsung’s technology leadership,” it added.
Samsung ambitiously launched its top-end S10 5G smartphone earlier this year after South Korea won the global race to commercially launched the world’s first nationwide 5G network.
But in April it was embarrassingly forced to delay the release of its hotly anticipated Galaxy Fold phones after reviewers provided with early devices reported screen problems within days of use.
In another setback, earlier this month it also acknowledged a major flaw with its fingerprint system that allows other people to open its top-end smartphones.
Adding to Samsung’s woes, the retrial of its vice chairman Lee Jae-yong began last week over a sprawling corruption scandal that could see him return to prison.
He is not being held in custody during the trial, but it is expected to last for months and a guilty verdict could deprive the firm of its top decision-maker.