SEOUL: Samsung Electronics’ net profits surged more than 70 per cent in the second quarter thanks to higher memory chip prices fuelled by pandemic-led demand, the South Korean tech giant reported on Thursday.
Coronavirus-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”.
The world’s biggest smartphone maker saw net profits rise 73.4 per cent year-on-year to 9.6 trillion won ($8.4 billion) for April-June, the company said in a regulatory filing.
Operating profit increased 54.3 per cent 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 an on-quarter decline in Samsung’s earnings from its smartphone business because of supply chain problems that disrupted global production.
Samsung Electronics is the flagship subsidiary of the giant Samsung group, by far the largest of the family-controlled empires that dominate business in South Korea, the world’s 12th largest economy.
The conglomerate’s overall turnover is equivalent to one-fifth of gross domestic product. Analysts say the chip unit’s proportion of the firm’s profit is likely to grow in the months ahead.
“Samsung will benefit from memory chip prices that are likely to go higher in the third and fourth quarter,” Park Sung-soon, an analyst at Cape Investment & Securities, said. — AFP
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