Samsung has announced its earnings guidance for the second quarter that ended June. The earnings reveal that Samsung’s profits more than halved from the previous year, according to analysts this was due to a continued weakness in price and a lower demand for memory chips. On a plus note for Samsung, the approximate 6.5 trillion won consolidated operating profit it higher than an industry estimate which expected the figure to be 6 trillion won.
While Samsung is known primarily for its smartphones, the firm also produces various bits of hardware including DRAM and NAND memory. Samsung relies on both these markets to turn profits but for the next 18 months or so demand and price for these products could remain low, according to the analyst, Evercore.
The downturn in profits is not new for Samsung, in the first quarter it reported an operating profit of roughly 6.2 trillion won, down from 15.64 trillion the year before, which is a 60% drop. Given Evercore’s prediction about the memory market, it’s unlikely that Samsung will return to the sort of profits that it was seeing back in 2018 for a while.