Samsung Electronics Co’s net profit surged more than 70 percent in the second quarter thanks to higher memorychip prices fueled by demand spurred by the COVID-19 pandemic, the South Korean tech giant reported yesterday.
Pandemic-driven working from home boosted demand for devices and appliances powered by Samsung’s memory chips.
The company said that “memory shipments exceeded previous guidance and price increases were higher than expected.”
Photo: EPA-EFE
The world’s biggest smartphone maker saw net profit rise 73.4 percent year-on-year to 9.6 trillion won (US$8.38 billion) for April to June, the company said in a regulatory filing.
Operating profit increased 54.3 percent to 12.6 trillion won from 8.1 trillion won a year earlier, more than half of which came from the firm’s semiconductor business.
The strong results come despite a quarter-on-quarter decline in Samsung’s earnings from its smartphone business because of supply chain problems that disrupted global production.
“Samsung will benefit from memorychip prices that are likely to go higher in the third and fourth quarter,” Cape Investment & Securities analyst Park Sung-soon said.
The firm anticipates favorable market conditions for the rest of the year, with continued demand for memory chips in the server and mobile markets, but it warned that pandemic-fueled uncertainty would persist in the second half, citing “continued disruptions in component supply.”
Samsung is expected to showcase the latest foldable smartphone models of its Galaxy Z and clamshell Galaxy Z Flip next month. The upcoming gadgets would be equipped with “new multitasking capabilities and enhanced durability,” said T.M. Roh, head of Samsung’s mobile communications business.
Samsung aims to solidify its position in the smartphone market “with the rollout of its premium mobile lineups as well as cheaper models in the third quarter,” said James Kang, senior analyst at Euromonitor International.
The company could face headwinds next year, as consumer demand is likely to be weaker than this year, Kang said.
Samsung also faces legal challenges. Its leader, Jay Y. Lee, is on trial, charged with manipulating a takeover to smooth his succession at the top of Samsung Group.
Lee was separately jailed in January over a sprawling corruption scandal that brought down former South Korean president Park Geun-hye. He is eligible for parole next month after completing more than half of his two-and-a-half year jail term.
Meanwhile, LG Electronics Co, South Korea’s second-largest appliance firm after Samsung, posted a 65.5 percent jump in operating profit for the second quarter, to 1.1 trillion won.
TRADE WAR: Tariffs should also apply to any goods that pass through the new Beijing-funded port in Chancay, Peru, an adviser to US president-elect Donald Trump said A veteran adviser to US president-elect Donald Trump is proposing that the 60 percent tariffs that Trump vowed to impose on Chinese goods also apply to goods from any country that pass through a new port that Beijing has built in Peru. The duties should apply to goods from China or countries in South America that pass through the new deep-water port Chancay, a town 60km north of Lima, said Mauricio Claver-Carone, an adviser to the Trump transition team who served as senior director for the western hemisphere on the White House National Security Council in his first administration. “Any product going
TECH SECURITY: The deal assures that ‘some of the most sought-after technology on the planet’ returns to the US, US Secretary of Commerce Gina Raimondo said The administration of US President Joe Biden finalized its CHIPS Act incentive awards for Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), marking a major milestone for a program meant to bring semiconductor production back to US soil. TSMC would get US$6.6 billion in grants as part of the contract, the US Department of Commerce said in a statement yesterday. Though the amount was disclosed earlier this year as part of a preliminary agreement, the deal is now legally binding — making it the first major CHIPS Act award to reach this stage. The chipmaker, which is also taking up to US$5 billion
High above the sparkling surface of the Athens coastline, the cranes for building the 50-floor luxury tower centerpiece of Greece’s future “smart city” look out over the Saronic Gulf. At their feet, construction machinery stirs up dust. Its backers say the 8 billion euro (US$8.43 billion) project financed by private funds is a symbol of Greece’s renaissance after the years of financial stagnation that saw investors flee the country. However, critics see it more as a future “ghetto for the rich.” It is hard to imagine that 10km from the Acropolis, a new city “three times the size of Monaco”
STRUGGLING BUSINESS: South Korea’s biggest company and semiconductor manufacturer’s buyback fuels concerns that it could be missing out on the AI boom Samsung Electronics Co plans to buy back about 10 trillion won (US$7.2 billion) of its own stock over the next year, putting in motion one of the larger shareholder return programs in its history. South Korea’s biggest company would repurchase the stock in stages over the coming 12 months, it said in a regulatory filing on Friday. As a first step, it would buy back about 3 trillion won of paper starting today up until February next year, all of which it would cancel. The board would deliberate on how best to effect the remaining 7 trillion won of buybacks. The move
RSS