Samsung’s Q2 Profit Likely Up 38% Due To Chip Prices

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Samsung Electronics likely saw a 38% rise in profits for the April-June quarter thanks to strong chip prices and demand from a pandemic-induced consumer appetite for electronics and data center investment, which is now recovering.

The operating profit of the world’s largest memory chip and smartphone manufacturer is expected to have risen to 11.3 trillion won ($10 billion).

Samsung’s strong performance, which is surprising because it shipped fewer smartphones than in the January-March period, illustrates the very high demand for chips that has depleted inventories and filled production capacity.

The result would be a 20% increase over the first quarter and marks Samsung’s highest operating profit for the second quarter since 2018, with revenue expected to have risen 15.4%.

Prices of DRAM chips, which are ubiquitous in servers, mobile phones and other computing devices, jumped 27% compared to the March quarter, while prices of NAND flash chips, which serve the data storage market, rose 8.6%.

They estimated that the chip division’s operating profit in April-June rose about 22% from the same period last year to about 6.6 trillion won.

Still, Samsung’s smartphone sales fell from about 76 million in the first quarter to about 59 million in April-June as sales slowed for its newest flagship model, which hit the market earlier this year.

Lower demand from India, ravaged by the pandemic during the quarter, as well as a tight supply of some mobile processor chips, may also have had an impact on shipments, said analysts, who estimated the mobile business’s operating profit at about 2.9 trillion won.

For more information, read the original story in Reuters.

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