Samsung profit hits 14-year low again as chip slump continues

Samsung reported its lowest operating profit in 14 years in the April-June quarter this year due to the ongoing slowdown in the memory chip market.

The South Korean tech giant said in its earnings guidance that it reported 60 trillion won in revenue and 0.6 trillion won in operating profit, declines of 22.28% and 95.74%, respectively, from a year earlier.

This is the second consecutive quarter of profit decline for the company. Samsung’s profit was also down 96% in the last quarter.

As Samsung will reveal its full earnings report later this month, the exact details are not yet clear, but analysts expect poor performance from its chip division could be the reason for the profit decline, as in the previous quarter. Was. However, a solid performance from Samsung’s smartphone business is expected.

The memory chip industry is currently going through a supply crunch__ where the supply of chips exceeds demand__ that has affected the bottom lines of all three major memory chip makers, Samsung, SK Hynix and Micron.

Samsung itself warned during its first-quarter conference call that it expected the downturn to continue at least through the second quarter and that it anticipated difficulties throughout the year.

However, the South Korean tech giant, the world’s largest memory chip maker, also said that the outlook for the memory chip market was bright in the long term, fueled by trends such as AI and high-performance computing.

The memory chip market traditionally moves in cycles, where downturns are followed by periods of high growth. Looking ahead, Samsung’s third-quarter earnings will be a barometer of whether the memory chip market begins to recover within the year.