Samsung Electronics Registers Slump in Profits Due to Weak Chip Market

The world's biggest smartphone and memory chip maker Samsung Electronics reported second-quarter net profits slumping by more than half in the face of a weakening chip market, and as a trade row builds between Seoul and Tokyo.

The flagship subsidiary of the sprawling Samsung Group has enjoyed record profits in recent years despite a series of setbacks but is now struggling with chip prices falling as global supply increases. Net profits in the three months to June were 5.18 trillion won (USD 4.38 billion), Samsung Electronics said in a statement, down 53 percent year-on-year.

"The weakness and price declines in the memory chip market persisted... despite a limited recovery in demand," it said. In mobile phones, it achieved "stronger shipments on new mass-market models but was overall weighed down by slower sales of flagship models and increased marketing expenses", it added. The results come hours after Apple, one of Samsung's main rivals, delivered better-than-expected results as growth from services helped offset weak iPhone sales.