For manufacturers of memory chips, the second quarter of this year turned out to be a favorable period, since high demand for this type of product was combined with high prices. Samsung Electronics was no exception, with the company’s operating income surging 54% to $ 10.95 billion, hitting a high since Q3 2018. The company expects demand for smartphones to recover to 2019 levels.
As noted by Reuters, even the contract division of Samsung Foundry performed well, increasing its revenue to a record level. Overall, operating profit from the semiconductor business increased 28% YoY. It should be borne in mind that in February, Samsung was forced to stop operations in Texas due to weather anomalies, and this incident affected the company’s activities in the following months.
In the mobile segment, Samsung’s profits have declined due to component shortages and business interruptions in Vietnamese businesses due to the spread of the coronavirus. In this country, the company assembles the bulk of smartphones. But in the second half of the year, Samsung expects the mobile market to recover to the levels of 2019, when the pandemic had not yet affected the market. The further spread of 5G networks and the emergence of new models of smartphones will facilitate this. Samsung’s display panel division will also capitalize on this trend – both through the release of its own more affordable models with flexible displays, and by updating the Apple iPhone lineup.
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Samsung Q2 2021 financial results are strong
“For the second half, market conditions will be favourable for the component business,” Samsung said in a statement. “Memory demand will likely grow by new smartphone model launches, with wider 5G availability driving growth.”
The total revenue of Samsung Electronics increased by 20% to $ 55.6 billion; net profit increased by 73% to $ 8.4 billion. In the current half of the year, the shortage of components will continue to negatively affect the market; and the global situation with the spread of coronavirus infection adds uncertainty. The server segment will support Samsung’s financials in the current half; and like mobile, profitability should improve as new component technologies are adopted. The public continues to count on the early release of the grandson of Samsung Electronics founder Lee Jae-yong; who is serving a sentence in prison; who continues to serve as vice president of the company and remains its nominal leader. According to some reports; the decision on a pardon may take place by the South Korean authorities as early as mid-August.