Chips posted Samsung’s highest revenue in Q2 since 2018

Folks stroll previous the brand of Samsung Electronics in Seoul on July 7, 2022. South Korea’s Samsung Electronics Co Ltd on Thursday turned in its finest April-June revenue since 2018, pushed by robust gross sales of reminiscence chips to server prospects, regardless of inflationary demand. -Hit smartphone maker cool.

Jang Yeon-jae | AFP | Getty Photos

South Korea’s Samsung Electronics on Thursday posted its finest April-June achieve since 2018, primarily based on robust gross sales of reminiscence chips to server prospects, regardless of calming demand from inflation-hit smartphone makers.

Shares of the world’s largest memory-chip and smartphone maker rose 2.5% after asserting second-quarter preliminary outcomes, whereas the broader market gained 1.5%.

Samsung posted an working revenue of 14 trillion gained ($10.7 billion), up 11% from 12.57 trillion gained a yr in the past, simply shy of SmartEstimate’s 14.45 trillion gained from Refinitiv. Income grew 21% to ₹77 trillion, in line with estimates.

The robust quarter for Samsung comes at a time when different chip makers have warned of a rising chip glut on prospects stocking up in the course of the pandemic to fulfill excessive demand for individuals working from residence.

Chipmakers, together with Micron and Superior Micro Units, have additionally indicated a current slowdown in demand as red-hot inflation drives spending.

“Reminiscence chipmakers are anticipated to construct up stock and enhance shipments when costs rise once more and demand improves subsequent yr,” stated Park Sung-soon, an analyst at Cape Funding & Securities.

Costs for particular DRAM chips utilized in gadgets and servers fell about 12% final month in comparison with a yr in the past, in line with knowledge supplier Trendforce. The costs of NAND flash chips used for knowledge storage are additionally projected to fall by 5% within the July-September interval as in comparison with the earlier quarter.

Smartphone demand weak

Analysts stated rising inflation, worries a couple of slowdown in key markets, the conflict in Ukraine and China’s COVID-19 lockdown have slowed smartphone gross sales, leaving server chip demand the one vibrant spot.

He stated Samsung’s earnings are shielded as massive US tech companies resembling Amazon, Microsoft, Alphabet’s Google and Meta use plenty of knowledge middle companies whereas shopping for chips to fulfill cloud demand. , They stated.

Making a case for robust server demand, Taiwanese contract electronics provider and Apple iPhone maker Foxconn on Monday raised its full-year outlook and stated it was optimistic concerning the third quarter.

A stronger greenback, which hit a 20-year excessive, may have helped Samsung’s chip earnings within the second quarter.

Samsung’s chip gross sales are primarily achieved in {dollars}, whereas it stories its features in Korean gained, so a agency dollar interprets to larger chip earnings.

Expect recovery in Samsung's smartphone business: Analyst

Smartphone shipments estimated by Samsung’s cellular enterprise within the second quarter have been round 62-64 million, down about 5%-8% from March estimates, Counterpoint Analysis stated, as inflation hit smartphone demand.

Samsung shipped 74 million smartphones within the first quarter.

“This pattern is analogous for main international smartphone makers, though there’s a point of variation… Particularly, the influence on low- and mid-end smartphone demand appears to be extra extreme,” stated Jayne Park, senior analyst at Counterpoint. .

Supply hyperlink

Related Posts