Samsung Suffers Steep Drop in Profits

Samsung suffered a W4.36 trillion loss from its semiconductor business in the second quarter due to the global economic slump (US$1=W1,278).

Combined losses in the chip division totaled W9 trillion for the first two quarters, but the company expects earnings to improve considerably in the third quarter as it cuts down on DRAM output and releases new foldable smartphones while the global semiconductor market recovers.

Samsung on Thursday said second-quarter sales fell 22 percent on-year to W60 trillion and operating profit plummeted 95 percent to W668.50 billion. Samsung's first-quarter operating profit was already the lowest in 14 years at W640 billion. Although forecast to fall even lower in the second quarter, it increased around four percent, avoiding the worst-case scenario.

The operating profit of the smartphone business plunged by almost W1 trillion from the previous three months to W3.04 trillion as it invested a record W7.20 trillion in research and development.

Meanwhile, LG's second quarter sales stood at W19.99 trillion, while operating profit reached W741.90 billion. Operating profit was estimated at W890 billion early this month, but the final results came out lower due to one-off costs including reimbursement for faulty batteries and severance pay in an early retirement drive.