Samsung Electronics reported second-quarter revenues up 20 percent year-on-year to KRW 63.67 trillion, driven by the strong market demand for memory and other semiconductor products as well as premium consumer electronics. This helped offset component shortages and supply chain problems affecting its smartphone business. Operating profit jumped 54 percent to KRW 12.57 trillion, and the company's net profit rose 73 percent to KRW 9.63 trillion.
For the second half, Samsung expects market conditions to remain favorable for the component business, with margins supported by a continued focus on premium products. However, risks of continued disruptions in component supply and uncertainties related to Covid-19 are likely to persist, Samsung warned.
The mobile phone business recorded quarterly sales of KRW 21.43 trillion, up 8 percent from a year earlier but down 24 percent from the strong first quarter. Operating profit, including the networks business, rose to KRW 3.24 trillion from KRW 1.85 trillion a year ago.
Samsung said smartphone demand weakened due to seasonality and a resurgence of Covid-19, while it also suffered from component shortages and production disruptions at its factory in Vietnam. Further disruptions can't be ruled out, but the company expects overall demand to recover to 2019 levels thanks to adoption of 5G and contactless services. Growth is expected from expansion of mid-market 5G phones, maintaining sales momentum in the flagship S series, expanding the Galaxy ecosystem with other devices and new foldables planned for unveiling next month.
The semiconductor business performed better than expected in Q2, as continued strong demand for PCs and servers supported increases in average prices and the Austin plant resumed normal operations. Revenues rose 25 percent year-on-year and were up 20 percent sequentially to KRW 22.74 trillion, and operating profit nearly doubled to KRW 6.93 trillion from KRW 3.56 trillion. Samsung expects demand to remain good in the rest of the year, supported by the lead up to peak smartphone and TV sales at year-end.
The company’s capital expenditures in the second quarter reached KRW 13.6 trillion, including KRW 12.5 trillion spent on semiconductors and KRW 0.6 trillion on displays.
