Samsung Electronics posted itsĀ slowest quarterly profit growth in more than a year on Tuesday as the sluggishĀ global smartphone market weighed on earnings, although the chip businessĀ continued to perform well.
Operating profit for the world's biggest chipmaker and smartphone maker roseĀ 5.7 percent to 14.9 trillion won ($13.3 billion) in the second quarter, SamsungĀ said in a regulatory filing, compared with 14.8 trillion won it had estimated.
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The Apple components supplier and smartphone rival saidĀ operating profit from the mobile business sank 34 percent from a year ago, andĀ warned of stiffer competition in the second half due to the release of newĀ models.
The South Korean tech giant added however that demand for memory chips, itsĀ biggest earnings contributor by far, would remain strong in the second halfĀ thanks to the growth of server data centers.
Revenue for the April-June period fell 4 percent to 58.5 trillion won,Ā broadly in line with Samsung's earlier estimate.
Like other big electronics firms, Samsung faces challenges from theĀ U.S.-China trade war, falling prices of some memory chips and the rise of cheapĀ Chinese-made handsets.
Samsung's difficulties in the mobile market, which accounts for about 40Ā percent of its revenue, have been exacerbated by its recent lack of innovationĀ to drive sales of its premium Galaxy series gadgets. The mobile business bookedĀ 2.7 trillion won in quarterly operating profit.
Data released by market tracker Counterpoint Research in July showedĀ Samsung's latest Galaxy 9 Plus premium handset had been overtaken by Apple'sĀ iPhone 8 as the world's top-selling smartphone.
Competition from cheaper Chinese brands like Xiaomi andĀ Huawei have already seen Samsung lose market share in China and India,Ā the world's top smartphone markets.
Samsung regained its lead in India's smartphone market in the second quarterĀ thanks to solid sales in its budget segment according to Counterpoint Research.Ā
While the mobile business struggles, the chip business remained Samsung'sĀ top earner in the second quarter as sales to the cloud-computing andĀ crypto-currency industries propped up DRAM chip prices even as NAND flash memoryĀ prices slipped.
Samsung's chip unit posted a record 11.6 trillion won operating profit, upĀ 45 percent from a year ago.
Samsung shares were down 0.5 percent in early trading, compared with 0.2Ā percent drop in the broader market.