Samsung Electronics expects third-quarter profit to fall by 78% due to widening chip losses.

CTOnews.com, Oct. 11 (Xinhua)-- Samsung Electronics reported on Wednesday that operating profit could fall 78% in the third quarter as the continuing impact of a global chip glut led to a loss in the South Korean technology giant's cash cow business.

In a brief preliminary earnings statement, the world's largest maker of memory chips and smartphones expects operating profit to fall to 2.4 trillion won from 10.85 trillion won a year ago (CTOnews.com Note: about 12.96 billion yuan) from July to September.

This is largely in line with previous analysts' predictions that smartphone and PC makers have been avoiding buying new memory chips and opting instead to run out of existing inventory within months because of concerns about the recession. Analysts say their inventories are low enough that demand is expected to rebound early next year.