Samsung Expects Lower Profit Amid Chip Swoon

The world's biggest maker of semiconductors and smartphones has struggled with falling prices for DRAM and NAND memory chips.

Visitors near the logo of Samsung Electronics at a semiconductor exhibition in Seoul, Oct. 8, 2019.
Visitors near the logo of Samsung Electronics at a semiconductor exhibition in Seoul, Oct. 8, 2019.
AP Photo/Lee Jin-man

SEOUL, South Korea (AP) — Samsung Electronics on Tuesday predicted its operating profit for the last quarter will fall by more than half from a year earlier amid sluggish global demand for computer chips.

The South Korean technology giant estimated an operating profit of 7.7 trillion won ($6.4 billion) for the July-September quarter, which would be a 56.2% drop from the same period last year.

The company says its third quarter revenue likely rose 5.3% from last year to 62 trillion won ($52 billion).

South Korea's biggest company is suffering from the slowdown in its core industry, though analysts say the demand will likely revive as next-generation networks are rolled out.

Samsung is the world's biggest maker of semiconductors and smartphones, but it has struggled with falling prices for DRAM and NAND memory chips since late last year. The situation was made worse by U.S. sanctions against China's Huawei Technologies, a major purchaser of Samsung's chips.

Analysts say Samsung's sales during the third quarter should have been boosted by the launch of its Galaxy Note 10 smartphone and an improvement in display shipments driven by the release of new devices by Apple.

The company did not provide a detailed account of its performance by division. Its finalized earnings report is due later this month.

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