South Korean technology giant Samsung Electronics is likely to report 50% lower earnings in Q2 2019 at the preliminary results on Friday. The main negative factor for the collapse in profit is the fall in sales of chips to the Chinese Huawei.

Quarterly results will be the lowest for the company in nearly three years, and the prospects for recovery are after several months, while over-supply continues, and there is a slowdown in the technology market.

The global provider of DRAM and NAND memory chips is also the world’s largest smartphone maker, a market where Huawei ranks second. Companies around the world were forced to restrict business with Huawei to meet American commercial sanctions against the company, which Washington imposed against claims that pose a threat to national security.

Although chip profits were affected by sales to Huawei, Samsung’s smartphone business is likely to win from the nearly 40% drop in Huawei’s international smartphone sales. Still, Huawei Technologies has had strong support at home, which is the largest smartphone market in the world and will assist to maintain its global position.

Chip sales account for most of Samsung’s profit (more than two-thirds), while saturation in the smartphone market and falling demand from data centers have already put pressure on prices.

DRAM chips are unlikely to recover in the second half of this year.