Samsung expects strong chip demand after robust Q2 results

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Seoul, July 29 (IANS) Samsung Electronics on Thursday expected solid chip demand to continue in the second half of the year with recovery in the mobile business after delivering robust second-quarter performance.

Its net profit stood at 9.63 trillion won ($8.3 billion) in the April-June period, up 73.4 percent from a year earlier, the world's largest memory chip and smartphone vendor said in a regulatory filing.

Its second-quarter operating profit jumped 54.3 percent on-year to 12.56 trillion won, the largest since the third quarter of 2018, while sales rose 20.2 percent on-year to 63.67 trillion won over the cited period, the largest for any second quarter to date, reports Yonhap news agency.

The figures were in line with its earnings guidance announced earlier this month that beat the market consensus.

On a quarterly basis, Samsung's second-quarter operating profit was up 33.9 percent from the first quarter, although that of sales was down 2.6 percent from the previous quarter. Net profit was 34.9 percent up from the first quarter.

Samsung's chip business anchored the upbeat performance on the back of rising memory prices and a recovery from the foundry sector. The company had suffered from a monthlong shutdown of the company's foundry fab in Austin, Texas, where a severe winter storm caused a power outage in February.

Revenue from the semiconductor unit stood at 22.74 trillion won in the second quarter of the year, up 24.7 percent from a year earlier, while its operating profit jumped 27.6 percent on-year to 6.93 trillion won.

Compared with the first quarter, its operating profit more than doubled, while sales increased 19.6 percent.

"The memory business reported a significant increase in earnings from the previous quarter, led by strong demand for server and PC memory, as well as stronger-than-expected increases in average sales prices for both DRAM and NAND chips," Samsung said.

For the second half of the year, Samsung expected memory demand to remain strong, although the market could see supply problems for components, while dealing with the rise of COVID-19 variants and geopolitical tensions.

"Memory demand will likely be buoyed by new smartphone model launches, with the wider 5G availability driving growth in content-per-box," the company said. "Increasing adoption of the latest CPU, along with growing enterprise PC demand to support the new remote work dynamics, is expected to support memory demand for servers and PCs."

For the whole year, Samsung predicted DRAM market bit growth to be mid-20 percent.

Regarding NAND, Samsung said its bit growth was in the high-single-digit percentage range, with the ASP rising in the mid-single-digit percentage range.

In the third quarter, Samsung estimated the market NAND bit growth to be in the low teens, with the company performing similar to the market level.

For the whole of 2021, Samsung estimated the NAND market bit growth to be in the 40 percent range.

For its logic chip business, Samsung said it expects its overall earnings to improve, especially in the third quarter, on the back of rising demand for system-on-chip and OLED display driver IC products, as the business anticipates "strong seasonality" for smartphones and TVs.

--IANS

na/