Samsung Flags Massive Drop in Quarterly Profit as Chip Glut Drags on

Samsung Electronics reported a predicted 96% drop in second-quarter operating profit, estimating it to be 600 billion won ($459 million), largely in line with forecasts and the company’s lowest profit for any quarter since 2009.

The profit estimate aligns with a 555 billion won Refinitiv SmartEstimate, with Samsung shares falling 1.4% in early trade.

Losses in Samsung’s memory chip business likely shrank in the second quarter due to increased sales of DRAM chips, although memory prices fell.

Analysts expect the memory chip market to hit bottom in the third quarter, with a rebound expected in earnest from the fourth quarter.

Samsung is set to unveil its latest foldable smartphones earlier than usual in a bid to dominate the premium phone market before the release of Apple’s next iPhone.

However, analyst outlooks for Samsung’s mobile profits in the third quarter were mixed due to weak consumer sentiment in the global smartphone market.

Samsung also projected a 22% decline in revenue for the second quarter compared to the same period last year.