Samsung profit slumps on weak chip prices

  • Business
  • Thursday, 17 Jul 2003

SEOUL: South Korean technology giant Samsung Electronics Co Ltd reported yesterday a 41% slump in second-quarter profit as prices for its mainstay memory chips and flat panel computer screens crumbled. 

But investors still bid up Samsung’s shares 1.2% to a 15-month high, betting that the second quarter marked the trough as demand for PCs is likely to pick up and cash-strapped rivals are falling behind in production of advanced memory chips. 

Samsung's mobile phone sales fell 7.7% short of target in the quarter amid the SARS outbreak in China and tougher US market conditions, but the company said it still expected to beat its target to sell a total of 52.5 million cell phones this year. 

Samsung, known for its sleek folding colour-screen mobiles with features such as cameras and voice dialling, said it aimed to gain market share by introducing 20 new models in the second half. 

In the second quarter, Samsung made a net profit of 1.13 trillion won (US$960mil), compared with a 1.92 trillion won a year ago. Turnover was 9.84 trillion won versus a revised year-ago figure of 9.73 trillion. 

Slow PC demand triggered by the global economic downturn forced Samsung, the world’s top memory chip maker, to slash chip prices in the second quarter. But the company predicted a rebound. 

“The PC market will likely grow 11% quarter-on-quarter, driven by the corporate replacement demand,” said Kim Ilung, vice-president at Samsung’s semiconductor division, in a conference call with analysts. – Reuters  

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