Samsung Electronics Q2 Profit Likely Jumped 38% On Strong Chip Prices, Says Snalysts

South Korean tech giant Samsung Electronics likely saw a spike of 38 percent in profit for the April-June quarter of this year, according to analysts. This is as a result of the strong prices of the chipsets in the market, coupled with an increase in demand spurred by a pandemic-led consumer appetite for electronics, and the recovering investment in data centres, that has resulted in good operating profit for the firm. Operating profit for the world’s biggest memory chip and smartphone maker likely jumped to 11.3 trillion won ($10 billion).

Samsung’s strong performance despite the company shipping fewer smartphones than in January-March is thanks to the astronomical demand for chips that has filled production capacity. Samsung’s revenue likely rose 15.4%.

According to analysts, the company’s chip division likely benefitted from memory chip price hikes as well. Samsung provides innovative semiconductor solutions, including DRAM, SSD, processors, image sensors.

The price of DRAM chips increased in price by 27% compared to the March quarter, while NAND flash chips increased by 8.6%.

Samsung’s leading-edge DRAM solutions are globally used in today’s current digital devices, owing to the solutions’ industry-leading performance, density, and energy efficiency. Samsung has been providing the industry’s first DRAM solutions based on 10nm-class process and HBM memory for use in applications ranging from High-Performance Computing (HPC), advanced graphics and network systems, next-generation data centres, enterprise servers, and artificial intelligence that deal with data-intensive applications including real-time analytics, high-frequency trading, and artificial intelligence.

Since 2013, Samsung’s industry-first 3D V-NAND technology has overcome the challenges posed for former data storage devices and secured optimal performance, density, and reliability. In particular, Samsung’s V-NAND SSDs offer unprecedented scalability that will continue to address the ever-increasing needs for data processing and storage systems.

Samsung’s chip-contract manufacturing and logic chip design business also experienced an improvement in its profit. According to analysts, this is partly because operations at its Texas factory were back to normal.

The operating profit for the chip division is estimated to be 6.6 trillion won, rising about 22% from the year-earlier period.

Still, Samsung’s smartphone shipments dropped to about 59 million in April-June from about 76 million in the January- March quarter, as sales slowed for its latest flagship model, launched in mid-January. This reduction in shipment is postulated to have been affected by certain factors, such as India’s reduced demand due to the pandemic, and the tight supply of some mobile processor chips.