Samsung operating profits to rise by 15.6% over strong chip demand

Samsung operating profits to rise by 15.6% over strong chip demand

According to a recent survey, the second quarter of 2022 seems lucrative for Samsung Electronics Co. Ltd as the South Korean electronics giant is likely to register a 15.6% rise in operating profits owing to a booming semiconductor business.

This gain does not seem affected by a fall in the demand for smartphones and home appliances over the past few months. Financial data available from a reputed news agency indicates that the company is slated to showcase an operating profit of USD 11.1 billion during April- June.

Moreover, the survey highlights that the world’s largest memory chip maker is likely to witness an estimated 20.6% increase in Q2 sales amounting to USD 58.6 billion. Meanwhile, net income is expected to showcase a rise of 19.8%, amassing a remuneration of USD 8.78 billion during the timeline.

This monumental performance can be attributed to escalating demand for memory chips that are utilized within data centers and servers. Notably, global sales margins of both DRAM and NAND flash grew by 9% and 2% respectively in the same quarter.

The chip segment is expected to amass an operating profit of USD 7.48 billion, recording a stellar rise of 42% through the second quarter. Despite the positive outlook, Samsung’s operating profits from the smartphone division are likely to come down to USD 1.98 billion, registering a drop of 16% from the previous quarter due to soaring inflation and relatively decreased consumer spending on electronics.

On the other hand, the home appliances division also witnessed a significant fall in operating profits, amassing USD 381.6 million, which is 50% lesser compared to the previous year due to the weakened spending capacity of consumers and rising raw material prices.

Highlighting the upheaval, seasoned analysts claim that the ongoing war in Ukraine, repeated lockdowns in China in the wake of the Covid-19 pandemic, economic instability, and inflation are all anticipated to plummet the demand for electronic devices in the second half of this year.

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About the author

Anjali Mishra

Anjali Mishra

A postgraduate in Criminal Law, Anjali Mishra uses her analytical skills to understand and write about all things market. Anjali holds a keen interest in writing insightful articles on healthcare, business, finance, and emerging technologies for AlpenHornNews and numerous other portals. Coming from outside the economical milieu, Anjali aims to write in a way that helps readers with non-technical knowledge understand technical concepts with ease.