Samsung reports smallest profits in four years

Over-supply of memory chips hits prices

Mobile phone shipments have increased at Samsung

Samsung Electronics has reported its smallest quarterly profits in four years after a fall in the price of computer memory chips overshadowed a rise in flat-screen monitor sales.

But the world’s top memory chipmaker is predicting a more positive second half of the year, with sales of dynamic random access memory (Dram) chips expected to rise on seasonal demand, on top of increased mobile phone and flat-screen monitor sales.

Samsung says second quarter profits reached 1.42 trillion won (£760m), down five per cent on last year and the worst since the second quarter of 2003.

Total sales for the quarter increased four per cent to 14.63 trillion won (£7.8bn) on the back of strong performance internationally.

Shipments of mobile phones rose 49 per cent to 37.4 million, leading Samsung to raise full-year forecasts from 133 million to at least 150 million. Sales of LCD screens have also risen by 17 per cent.

But Dram sales fell seven per cent after sluggish demand led to an over-supply that caused prices to drop by as much as 40 per cent. Samsung predicts Dram prices will rise in the third quarter and shipments should increase more than 100 per cent.