SEOUL: Samsung Electronics said first-quarter profit fell 30 percent on declines in memory chip prices and reduced profitability in liquid crystal displays and flat screen televisions. Samsung, the manufacturer of the Galaxy S smartphone and Galaxy Tab tablet computer, earned 2.78 trillion won ($2.59 billion) in the three months that ended March 31, it said Friday. That compared with net profit of 3.99 trillion won a year earlier. The company said that smartphones were a bright spot during the quarter and also announced that it was raising the ante in a legal dispute with Apple Inc. by filing a new lawsuit against the US company over alleged patent infringement. Suwon, South Korea-based Samsung Electronics Co. is the top global manufacturer of flat screen televisions, memory chips and liquid crystal displays and ranks No. 2 in mobile phones behind Finland's Nokia Corp. Samsung posted record annual sales, operating profit and net profit in 2010. The company had warned, however, that the outlook for this year was uncertain given weak prices for components and consumer electronics products that hurt profitability at the end of 2010. Samsung said sales in the first quarter rose 6.8 percent to 36.99 trillion won. Robert Yi, a Samsung vice president, described the company's business environment as “difficult” during the first quarter, citing rising raw material costs, financial market instability in Europe, Japan's March 11 earthquake and the political situation in the Middle East. Yi said the current second quarter was likely to remain an “adverse business environment,” though he was more optimistic for the second half of the year, partially on expectations for seasonal increases in demand for semiconductors and LCD panels. Samsung expects that the industry may face some component supply shortages due to Japan's earthquake, though Samsung was in good shape, Yi said. “As for our company, currently we expect minimal negative impact as we have already secured most of our key components and we continuously look to diversify our supplier base,” he told analysts on a conference call. Japanese companies are key suppliers of high-tech materials and components. Mobile phone sales declined 14 percent to 70 million devices, but strong sales of smartphones and “high-end mobile devices” — an apparent reference to tablets — boosted profitability, the company said.
