SEOUL, South Korea (AP) -- Samsung Electronics Co. said Friday its third-quarter profit fell 44.4 percent, citing the global economic downturn and lower prices for its mainstay semiconductors and flat screens. Its shares tumbled 14 percent.
Samsung is the world's biggest manufacturer of memory chips, liquid crystal displays and flat screen televisions. It ranks second behind Finland's Nokia Corp. in mobile phones.
Samsung and its competitors have struggled with falling prices amid an oversupply of chips.
The Suwon, South Korea-based company said it earned 1.22 trillion won ($869 million) in the three months ending Sept. 30, down from 2.19 trillion won a year ago.
Despite lower prices on some products, its overall sales rose 15.4 percent to 19.3 trillion won ($13.7 billion) from 16.7 trillion won a year earlier.
"Overall, our third-quarter earnings were impacted by the worsening market conditions resulting from the slowdown in the global economy," Samsung executive vice president Chu Woo-sik told analysts on a conference call.
"Moreover, our DRAM, NAND and LCD businesses all faced steep price declines led by persistent oversupply in the industry," Chu added.
DRAM, or dynamic random access memory, chips are used mostly in personal computers. NAND flash memory chips are used in digital devices such as cameras and music players.
Chu said prices for NAND chips fell 35 percent from the second quarter while those for DRAM declined 17 percent.
In a statement, Samsung said that despite the sharp price drops for chips, its semiconductor business still made money, "making Samsung the only major player in the memory industry worldwide that remains profitable in a significant industry downturn."
A bright spot for Samsung continued to be mobile phones.
The company said it sold 51.8 million handsets in the period, a quarterly record.
Samsung said it expects to sell 200 million handsets for all of 2008.
Samsung announced Wednesday it had withdrawn a $26 a share bid to acquire U.S. flash memory card maker SanDisk Corp., but suggested it was still interested in buying the Milpitas, Calif.-based company at a lower price.
Shares in Samsung, which released earnings results shortly after the stock market opened, plunged 14 percent to close at 407,500 won ($286), punctuating a four-day decline in which the stock price fell 21.8 percent.
The decline came amid a sell-off in the broader Korean Stock Price Index, which this week dropped 20.5 percent -- the biggest weekly decline since records began to be kept in 1987.
