Sina Technologies News, Beijing Time, July 3 evening news, according to Reuters, Samsung Electronics is likely to cut its profits by more than half when it releases its preliminary results for the second quarter on Friday, largely due to the decline in the number of memory chips sold to the Chinese market.
For this reason, Samsung Electronics's second quarter results are likely to hit the lowest level in nearly three years. Analysts said that because of the general slowdown in the technology market and the continuing oversupply of Samsung's memory chips, it would take several quarters for profits to recover.
Samsung Electronics's smartphone business is likely to benefit from declining shipments from competitors, but more than two-thirds of Samsung Electronics's profits come from its chip business. At the same time, with the saturation of the smartphone market and the declining demand for chips from data centers, the price of memory chips has been depressed worldwide.
Avril Wu, an analyst at TrendForce, a market research firm, said the price of memory chips was unlikely to rebound in the second half of this year. She expects Samsung Electronics to empty its chip inventory by the first half of 2020.
According to Refinitiv Smart Estimate, Samsung Electronics's second-quarter operating profit will reach 6 trillion won ($5.14 billion), down 60% from a year earlier. The data is based on the average expectations of 29 analysts surveyed by Refinitiv Smart Estimate.
Samsung Electronics will release preliminary second-quarter earnings data on Friday and final results later this month. (Li Ming)