Samsung Q2 profits soar as memory chip demand exceeds expectations
The increase in profits comes despite weakened demand for Samsung's smartphones
Samsung’s memory chip segment has helped the tech giant exceed financial analysts’ expectations by 1.2 trillion won (£763 million).
Samsung’s Q2 profits were expected to reach 11.3 trillion won. However, the company announced Wednesday that it managed to generate a profit of 12.5 trillion won for the quarter ended 30 June, with a 53.4% rise from the same period last year.
The impressive results were attributed to Samsung's memory chip shipments, which were significantly higher than expected and managed to provide the company with a profit despite a recorded decrease in its flagship smartphone shipments.
The demand for Samsung's premium smartphones weakened over 2020, with rumours circulating that its Note range could even be shelved indefinitely as the company focuses on more consciously priced offerings. The weakened demand caused the company's smartphone shipments to fall to about 59 million in the latest quarter from about 76 million in the first quarter, according to Shinyoung Investment & Securities.
Meanwhile, Samsung’s memory chip division, which focuses on DRAM chips widely used in servers, mobile phones and other computing devices, has risen by an estimated 20% since the first quarter.
This was partially credited to the reopening of Samsung’s two factories in Austin, Texas, which in February were forced to shut down due to extreme weather conditions ravaging parts of the US. The temporary suspension worsened an already critical shortage in the semiconductor supply chain.
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The second quarter of 2021 also saw Samsung launch the "industry's first" 24G SAS SSD, capable of supporting twice the speed of its previous 12G SAS SSD. The company is planning to begin mass production of the SSD in the second half of this year and has already begun sampling it with select customers.
“Like we have done with the PM1653, Samsung will continue to collaborate with our customers to accommodate the ever-growing demand of the enterprise server market for the most uncompromising offerings available,” said Kwangil Park, senior vice president of the Memory Product Planning Team at Samsung.
Full details of Samsung’s Q2 financial results will be provided during an earnings call scheduled for 29 July.