Samsung Electronics expects the great demand for semiconductors to continue and develop favorably in the second half of the year.

At the same time, the company warns of the economic dangers of the flare-up of corona infections in many countries.

The risks of ongoing disruptions in the supply of preliminary products and the uncertainty about Covid-19 are likely to persist, the company said when it released its quarterly results on Thursday.

Patrick Welter

Correspondent for business and politics in Japan, based in Tokyo.

  • Follow I follow

The South Korean electronics manufacturer closed the fourth year with a surplus of 9.45 trillion won (7 billion euros), 72 percent more than a year ago.

The largest manufacturer of electronic memory modules and smartphones demonstrated once again how the two major pillars of the business complement each other from an economic point of view.

The lower sales of smartphones and cell phones were more than offset by a significant increase in sales in the business with computer chips and memory modules.

According to the information, total sales rose by 20 percent compared to the same quarter of the previous year to 63.7 trillion won (47 billion euros).

Samsung increased its operating profit by 54 percent to 12.57 trillion won.

These key figures were slightly better than Samsung estimated in advance at the beginning of July.

High demand for computers

The delivery of memory modules and the price increases in the market would have exceeded expectations in the quarter, Samsung justified the significant improvement in operating profit in this segment. Semiconductor sales increased 25 percent, 42.7 trillion won. Operating profit increased 28 percent, 6.9 trillion won. The business is being driven by the great demand for computers and large data computers resulting from the corona-induced trend towards working from home. Samsung also benefited from expanding its semiconductor manufacturing capacity and resolving weather-related production disruptions at a factory in Texas faster than expected. Koreans expect the strong demand to continue in the coming months,even if there could be bottlenecks due to disruptions in the supply chain.

Business with smartphones was less successful for the most important company in South Korea from April to June. At 21.4 trillion won, sales were 8 percent higher than a year ago, but fell by 24 percent compared to the previous quarter. The reasons for this include bottlenecks in individual components and corona-related production disruptions in a Samsung factory in Vietnam.

According to its own statements, Samsung counteracted this by balancing the offer in the global supply chain.

This was clearly reflected in the operating result.

The operating profit margin in the business segment only fell from 15 to 14.3 percent compared to the first quarter.

Compared to the same quarter of the previous year, which was even more affected by the corona pandemic, Samsung increased operating profit in the mobile communications business by 66 percent to 3.24 trillion won.

The South Korean electronics giant is expected to introduce a new model of its flip-up smartphones in August.

The speculation is that Samsung wants to win more customers for these model variants with price cuts.

The quarterly result was improved by a special payment in the display business. Samsung does not provide any details, but analysts suspect that it is a payment of around 1 trillion won by the American electronics provider Apple. Such penalties are common when Apple takes back the number of pre-ordered screens for its products.

Keywords: