Image: Reuters Berita 24 English - Samsung Electronics Co. Ltd. reported its strongest April–June profit since 2018 with an 11% year-over-y...
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| Image: Reuters |
Berita 24 English - Samsung Electronics Co. Ltd. reported its strongest April–June profit since 2018 with an 11% year-over-year increase as persistent server demand for its memory chips offset decreased sales to smartphone manufacturers struggling with inflation.
The largest manufacturer of memory chips and smartphones in the world reported on Thursday that its operating profit for the second quarter increased to 14 trillion won ($10.73 billion) from 12.57 trillion won a year earlier.
That was just shy of Refinitiv's SmartEstimate of 14.45 trillion won.
Samsung stated in a brief preliminary earnings report that revenue likely increased by 21 percent from the same quarter a year earlier to 77 trillion won, in line with market estimates.
This month, a thorough earnings report from Samsung is expected.
Because huge U.S. tech companies that frequently utilise data centre services continued to purchase chips to meet cloud demand, Samsung's chip revenues were insulated last quarter from what experts believe to be a potential customer surplus following high demand in the previous two years.
However, according to data provider TrendForce, prices of certain DRAM chips used in electronic gadgets and servers dropped by roughly 12 percent last month compared to a year earlier. Analysts anticipate that prices will continue to decline as demand for smartphones and laptops declines.
"Server DRAM is now the only viable sales channel. Because of this, Korean manufacturers were the first to indicate that they would be open to discussing a quarterly price drop of more than 5% (for servers) "DRAMS)," claimed TrendForce.
According to TrendForce, prices for NAND Flash chips, which are used in tech gadgets for data storage, are also anticipated to decrease by as much as 5% from the prior quarter over the period of July to September.
After two boom years during the epidemic, when people purchased equipment to work remotely, chipmakers worldwide are now dealing with a cooling demand.
Slowing smartphone sales have been caused by factors such as rising prices, worries about a slowdown in important markets, the conflict in Ukraine, and China's COVID-19 lockdowns, with server chip demand remaining the lone area of optimism, according to analysts.
Shares of Samsung increased by 0.9% in early trading.
($1 = 1,304.4400 won)
