Samsung to make $11 billion profit on strong semiconductor business

Samsung Electronics expected to post more than 15% increase in second-quarter operating profit, helped by strength in semiconductors Company despite slowing demand for smartphones and home appliances, a report released on Tuesday.

The world’s largest memory chipmaker is expected to post operating profit of 14.5 trillion won ($11.1 billion) in the April-June period, up 15.6% from it a year ago, according to the survey by Yonhap Infomax, Yonhap’s financial data company. Press Agency.

Samsung’s second-quarter sales are expected to rise 20.6% to 76.8 trillion won, while net income is expected to jump 19.8% to 11.5 trillion won, according to the survey.

Strong demand for memory chips used in servers and data centers supported the technology company’s strong performance, with global shipments of DRAM and NAND Flash both increasing in the three months to June from 9% and 2% YoY, respectively.

By sector, Samsung’s chip business is expected to grow 42% to post an operating profit of 9.8 trillion won.

Growth in its smartphone business, however, appears to have weakened as consumer electronics spending slowed amid soaring inflation and recession fears.

Samsung’s smartphone shipments are expected to reach 61 million units in the second quarter, down 16% from the previous quarter. The division’s operating profit is expected to fall 600 billion won from a year ago to 2.6 trillion won.

Sales of household appliances are also penalized by the decline in consumer purchasing power, the rise in raw material costs and seasonal factors. The division’s operating profit is expected to be about 500 billion won, less than half the figure from a year ago.

The billboard sector is also expected to post weaker performance due to slower demand, with second-quarter operating profits expected to fall 300 billion won from a year ago to 1,000. billion won.

Analysts paint a bleak picture for the second half as the ongoing war in Ukraine, rising inflation and COVID-19 lockdowns in China depress demand and consumer spending on electronics.

Global shipments of consumer devices, such as cellphones and computers, are expected to decline 7.6% this year, according to technology research firm Gartner.

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