Samsung Electronics on Thursday reported a 95 % fall in second-quarter operating profit, as macroeconomic woes have taken a toll on demand for chips used in electronic gadgets from mobile phones to computers to cars.
The world's largest memory chip and smartphone maker logged a profit of 668.5 billion won ($525.8 million) for the April-June period, the lowest in 14 years. It went significantly down from the 14.1 trillion won it reported a year ago.
Sales fell 22.3 % to 60 trillion won from the previous year's 77.2 trillion won, the company said in a regulatory filing. Its second-quarter net profit came to 1.72 trillion won, down 84.5 % from a year earlier.
Samsung's Device Solutions division, which oversees its cash cow chip business, made losses of 4.36 trillion won, marking the division's second consecutive quarter of losses.
In the first quarter, Samsung's chip division reported its first financial loss in 14 years, as chip inventories grew significantly amid tapering global demand. Prior to that, the division recorded losses in the first quarter of 2009.
The chipmaker has forecast the global chip market will shrink 6 percent on-year to $563 billion this year, due to a sharp drop in demand, and warned of difficult conditions continuing throughout the year.
Source: Qatar News Agency