Market Digest

Samsung Electronics Q2 profit likely up 38pc

7 July, 2021 12:00 AM printer

SEOUL: Samsung Electronics likely saw a 38 per cent surge in profit for the April-June quarter thanks to strong chip prices and demand spurred by a pandemic-led consumer appetite for electronics as well as recovering investment in data centres.

Operating profit for the world’s biggest memory chip and smartphone maker likely jumped to 11.3 trillion won (US$10 billion), according to a Refinitiv SmartEstimate drawn from 20 analysts and weighted toward those who are more consistently accurate, report agencies.

The South Korean tech giant’s strong performance - coming despite it shipping fewer smartphones than in January-March - underscores the stratospheric  demand for chips that has depleted stockpiles and filled production capacity.

The result would be up 20 per cent from the first quarter and mark Samsung’s highest operating income for the second quarter since 2018. Revenue likely rose 15.4 per cent.

Samsung is scheduled to announce preliminary second-quarter results on Wednesday.

The company’s chip division likely benefited from memory chip price hikes that exceeded market estimates, analysts said, while shipments grew as well.

Prices of DRAM chips, widely used in servers, mobile phones and other computing devices, jumped 27 per cent compared to the March quarter, while those of NAND flash chips that serve the data storage market rose 8.6 per cent, according to research provider Trendforce.

Profit also improved at Samsung’s chip-contract manufacturing and logic chip design business, partly because operations at its storm-hit Texas factory returned to normal, analysts said.

They estimated the chip division’s operating profit in April-June rose about 22 per cent from the year-earlier period to about 6.6 trillion won.