Seoul: South Korean tech giant Samsung Electronics forecast an expectations-beating jump of more than 53% in second-quarter operating profit, thanks to strong chip prices and operations resuming at a key US factory.
The world’s biggest smartphone maker said, in an earnings estimate, that it expected operating profit of around 12.5 trillion won (US$11bil or RM45.75bil) for April to June.The figures were ahead of estimates, according to Bloomberg News.
Samsung Electronics is the flagship subsidiary of the giant Samsung group, by far the largest of the family-controlled empires known as chaebols that dominate business in South Korea, the world’s 12th largest economy.The conglomerate’s overall turnover is equivalent to a fifth of the national gross domestic product.
The coronavirus has wreaked havoc with the world economy, with lockdowns and travel bans imposed around the globe for many months.
But the pandemic – which has killed around four million people worldwide – has also seen many tech companies boom.
Coronavirus-driven working from home has boosted demand for devices powered by Samsung’s chips, as well as home appliances such as TVs and washing machines.
It estimated sales for the period at 63 trillion won (RM230bil), up around 19% year-on-year.
Analysts say the company has had a particular boost from memory chip price hikes.
Taipei-based market researcher TrendForce last month expected prices of memory chips, especially dynamic random access memory (DRAM) – widely used in servers and mobile phones – to rise through the third quarter of this year as the “severe undersupply situation persists”.
Samsung’s earnings “will remain solid, mostly due to increased demand for memory chips, rising DRAM prices, ” Tom Kang, a research director at market researcher Counterpoint, told AFP.
But Samsung Electronics shares were down 0.86% in morning trading in Seoul. — AFP