The semiconductor division, including the display business, posted a combined 3.54 trillion won in operating profit, nearly a fourth of what it earned a year earlier.

The chip-making business alone obtained 4.12 trillion won in operating profit, but the display business logged an operating loss of 560 billion won.

“The semiconductor sector saw a drop in memory chip prices as inventory adjustments continued at datacenter companies, while demand for high-density memory for mobile phones increased thanks to new flagship smartphones,” the company said. “The display panel business reported a quarterly loss due to decreased demand for flexible displays and increasing market supplies for large displays.”

Earnings improved at the system LSI and foundry businesses over the sales of smartphone application processors, according to the company. 

Samsung’s IT and mobile communications division also saw a drop in the on-year operating profit due to slow sales of premium smartphone although the latest Galaxy S10 series performed well.

The division posted 2.27 trillion won in Q1 operating profit, down 39 percent from the same quarter last year. 

“Profitability in the mobile business declined on-year as competition intensified in the low-end and mid-range segment,” Samsung said. “Amid softer demand in the overall smartphone market, revamping of the company’s mass-market lineup led to an on-year decrease in sales volume.”

However, earnings from the network business reported an increase buoyed by the launch of 5G telecom services in the country, it said.

The consumer electronics division posted a 5 percent growth in the quarterly operating profit on-year, which stood at 540 billion won. 

Sales of premium TVs such as QLED TVs and ultra-large size models contributed to the earnings growth, the company said.

By Song Su-hyun (song@heraldcorp.com)