The world's biggest smartphone and memory chip maker Samsung Electronics saw net profits slump by more than half in the second quarter, it said Wednesday, in the face of a weakening chip market and a trade row building between Seoul and Tokyo. Net profits in the three months to June were 5.18 trillion won ($4.38 billion), down 53 percent year-on-year. The flagship subsidiary of the sprawling Samsung Group has enjoyed record profits in recent years despite a series of setbacks, but is now struggling, with chip prices falling as global supply increases while demand weakens.
"The weakness and price declines in the memory chip market persisted... despite a limited recovery in demand," it said in a statement. In mobile phones, it achieved "stronger shipments on new mass-market models but was overall weighed down by slower sales of flagship models and increased marketing expenses", it said.
Samsung launched its top-end S10 5G smartphone earlier this year, after South Korea won the global race to commercially launch the world's first nationwide 5G network. But in April it was embarrassingly forced to delay the release of its new Galaxy Fold phones after reviewers provided with early devices reported screen problems within days of use.
A simmering dispute between South Korea and Japan, which has seen Tokyo impose restrictions on chemical exports crucial to the South's world-leading chip and smartphone companies -- is also expected to affect Samsung Electronics' key products. Operating profits plunged 56 percent to 6.6 trillion won in the second quarter, the firm said, while sales fell four percent to 56.13 trillion won.