Samsung expects 7% drop in revenue to 52 trillion in second-quarter

Samsung Electronics said on Tuesday its second-quarter revenue likely fell 7 percent to 52 trillion won from a year earlier.
Samsung Galaxy A8+ in IndiaSamsung released only limited data in Tuesday’s regulatory filing ahead of the release of its detailed earnings figures later this month.

Samsung said its operating profit likely rose 23 percent thanks to chip sales to data centres catering for a work-from-home economy during the coronavirus pandemic.

The sales offset weak demand for smartphones and TVs, while one-off gains from its display business, which counts Apple as a customer, also boosted profits.

The world’s top memory chip and smartphone maker said operating profit was likely 8.1 trillion won ($6.8 billion) in the quarter ended June. It would be the highest quarterly profit since the fourth quarter of 2018.

Work-from-home orders and growth in online learning is underpinning chip demand amid the Covid-19 pandemic and pushing up DRAM memory chip prices. US-based DRAM supplier Micron Technology forecast strong quarterly revenue last month.

“Chip demand was stronger than expected due to the COVID-19,” said Park Sung-soon, an analyst at Cape Investment & Securities.

Analysts warned that increases in memory chip prices may not continue in the second half of the year as data centre customers are likely to be conservative in stockpiling chips given the resurgence of Covid-19 cases in the United States and other countries

While prices jumped 14 percent on average in the quarter, they were flat in June versus May, data from DRAMeXchange showed.