Samsung Electronics first quarter profit falls 60% on year as weak chip prices bite

SEOUL (Reuters) – Samsung Electronics Co Ltd posted a 60% decline in the first quarter the operating profit on Tuesday, hit by falls in chip prices and slowing demand for displays.

FILE PHOTO: icipants at Samsung Electronics Co. Ltd. ‘ s Unpacked event in the testing of the new devices in San Francisco, California, USA, 20 February 2019, REUTERS/Stephen Nellis

The operating profit of 6.2 trillion won ($5.4 billion) in the January-March quarter, in line with the 6.2 trillion won, the company had estimated earlier this month.

The turnover decreased by 13.5 percent to 52.4 trillion won, is also in line with the earlier estimates.

Samsung’s core semiconductor business recorded a 64 percent drop in operating profit of 4.1 trillion won, while the display business logged 560 billion won in losses.

The world’s top maker of smartphones said the mobile business posted a 40 percent decrease in operating profit of 2.3 trillion won.

The South Korean tech giant is hoping to revive flagging growth in the mobile business with the latest handset, with a large, curving screen.

But in a blow to its renewed focus on innovation, Samsung delayed global sales of the next folding phone after a number of reviewers discovered problems with the display.

Memory chip makers including Samsung have been hit by a weaker global smartphone market and a decrease of the server of the question in a wider economic slowdown.

Samsung’s smaller rival, memory chip maker SK Hynix, posted last week, is the thinnest quarter the operating profit in more than two years, but said that the trust chip demand is expected to recover later this year as the server DRAM customers enhanced investments.

(This story corrects percentage changes in the paragraphs 4 and 5).

Reporting by Ju-min Park; Editing by Stephen Coates

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