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Samsung’s profit drops by more than 50 percent due to falling prices of memory chips

Samsung made more than half less profit in the second quarter of this year than in the same period last year. That is mainly due to the falling prices of memory chips, says the manufacturer. The smartphone division is also struggling.

For Samsung, the operating profit of the second quarter came to 6.6 trillion Korean wins, reports Samsung . That is around 5 billion euros. That is a decrease of 55.61 percent compared to the same period in the previous year. The turnover amounted to approximately 42.6 billion euros. The result was slightly better than Samsung had predicted at the beginning of the month .

Samsung blames the falling figures mainly on the memory chip market. Falling prices are a problem for the company, although there is a little more demand for the products. This decrease is mainly due to the fact that data centers purchase less expensive chips. That situation would only improve in the course of 2020, Samsung predicts.

In the segment that includes Samsung’s smartphones, operating profit fell by around 42 percent to € 1.18 billion converted. This was mainly because the Galaxy S10 was not sold as well as expected and in general fewer premium products were purchased. Samsung says that the release of the foldable Galaxy Fold phone later this year and the upcoming Galaxy Note 10 will allow better results. In addition, the company also comes with a number of new A-series telephones in the second half of the year, which should drive profit.

The company not only suffers from disappointing sales but also from international problems. A trade dispute between Japan and the home country of South Korea is an obstacle, as Japan has imposed export restrictions on materials used in smartphones and chips. The company says it is preparing for that problem to last a long time.

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