A supply glut squeezing memory chip prices, the company’s most important profit driver, is largely to blame. U. S. restrictions on Chinese telecom equipment giant Huawei, a major customer, also have been a drag.
The South Korean conglomerate said on Friday it expects operating profit for the three months to June to fall 56% from a year earlier, to 6. 5 trillion won ($5. 6 billion).
Japan accounts for 70%-90% of global production of the three materials, including fluorinated polyimides for smartphone displays, according to local media.
Local companies must apply for permission each time they want to ship to South Korean customers, a process that could take 90 days.
Japan has curbed exports to South Korea of vital materials used to make chips and display screens over an old wartime spat.
A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.
And it is being exacerbated by tensions between its two biggest trading partners, the United States and China, as well as slowing demand for semiconductors used in handsets and servers that power data centres.
FILE PHOTO: A visitor uses a mobile phone at the Samsung booth at the Mobile World Congress in Barcelona, Spain, February 26, 2019.
Last year, Seoul’s top court ordered Japanese companies Nippon Steel and Mitsubishi Heavy Industries to pay out individual reparations.
Prime Minister Shinzo Abe blasted the legal decisions and accused South Korea of breaching a 1965 treaty.
As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day.