Samsung may report 19% increase in revenue

Samsung Electronics revealed that its revenue in second-quarter rose an estimated 19 percent from the same period a year earlier to 63 trillion won.
Samsung Galaxy A8+ in IndiaSamsung released only limited data in Wednesday’s regulatory filing ahead of the release of detailed earnings figures later this month.

Samsung reported a likely 53 percent increase in second-quarter operating profit on the back of strong chip prices and demand despite lower smartphone sales.

The preliminary result shared by Samsung is up 33 percent from the first quarter and underscores the soaring demand for chips that has depleted stockpiles amid a pandemic-led consumer appetite for electronics and recovering investment in data centres, Reuters reported.

The world’s largest memory chip and smartphone maker said profit for the quarter ended June 30 was likely 12.5 trillion won ($11 billion). If confirmed later this month, it would be the tech giant’s biggest second-quarter profit since 2018.

“Third-quarter profit is expected to be even higher on strong mobile DRAM memory chip prices, and peak seasons for mobile and display businesses,” said Park Sung-soon, analyst at Cape Investment & Securities.

For the second quarter, Samsung’s chip division profit likely jumped by a fifth or more from a year earlier, analysts said, helped by strong memory-chip prices and demand for consumer electronics and from data centre customers.

Samsung’s memory chip shipments, especially for DRAM chips used in servers, mobile phones and other computing devices, were larger than expected, contributing to chip profits that dwarfed a steep quarter-over-quarter fall in smartphone shipments.

Improved yield in 1z nanometre DRAM chip production using ASML’s extreme ultraviolet lithography (EUV) machines also likely lessened costs from the first quarter, analysts said.

Profits at Samsung’s chip contract manufacturing and logic chip design businesses were likely to have improved too as operations at a storm-hit factory in Texas returned to normal, analysts said.

“One of the most-anticipated elements in the earnings call is how much the chip contract manufacturing business has progressed in competitiveness, and the current status of foundry customers and orders,” said Lee Won-sik, analyst at Korea Investment & Securities.

“Another is what changes Samsung expects in memory chip profitability, as competitors like Micron are said to be narrowing the technology gap (with Samsung),” Lee added.

Samsung’s smartphone shipments fell to about 59 million in April-June from about 76 million in the first quarter, according to Shinyoung Investment & Securities, as sales of its flagship model launched in the first quarter slowed.

New COVID-19 outbreaks in regions such as India and Vietnam, as well as constrained supply of mobile processor chips, hurt smartphone shipments in the quarter, analysts said. These conditions are likely to improve in the second half, they added.

A one-off gain for Samsung’s display unit, which analysts said was a compensation from Apple for previously ordering fewer components than agreed upon, was also included in the quarterly profit.

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