Samsung Electronics expects 2Q profits to increase by 11.4%

Despite persisting issues with the world’s supply chains, Samsung Electronics anticipates operational earnings to increase 11.4 percent in the second quarter, the South Korean electronics giant said in a statement on Thursday.

The largest smartphone manufacturer in the world predicted operational earnings for the second quarter of 2022 of around 14 trillion won ($10.7 billion), up from 12.6 trillion won in the same period in 2017.

Samsung anticipated that sales would have climbed by 21% year over year to 77 trillion won during the April–June period. The amount would be lower than its sales of 77.8 trillion won in the first quarter.

Analysts claimed that Samsung’s ongoing success in the memory chip market, which compensated for a fall in smartphone sales during the time period, boosted the company.

According to Park Sung-soon, an analyst at Cape Investment & Securities, “Samsung’s smartphone shipments for the second quarter are likely to be just over 60 million units, which is poorer than expected.”

According to international research firm Counterpoint, Samsung sold 74.5 million smartphones in the first quarter, dominating the global shipping market with a 23 percent share, just ahead of Apple’s 18 percent.

Since memory chips are now included into such a variety of gadgets as well as cloud servers, which are crucial for distant working in the modern era, the sector is less dependent on the cyclical demand for tech devices like smartphones and laptops.

However, due to Russia’s protracted conflict in Ukraine and escalating worries of a recession brought on by inflationary pressure, concerns are developing regarding the unpredictability of the global economic picture.

According to expert Park, it will be difficult for consumer demand for IT products to increase in the upcoming months under these conditions.

The flagship company of the enormous Samsung group, by far the biggest of the chaebols—family-controlled businesses—that rule the South Korean economy, is Samsung Electronics.

The total revenue of the conglomerate is about equal to one fifth of South Korea’s GDP.

As the globe struggles with chip shortages that have affected everything from vehicles and home appliances to smartphones and gaming consoles, Samsung Electronics, the largest memory chip manufacturer in the world, has aggressively increased investment in its semiconductor sector.

In an effort to catch up to and eventually surpass Taiwan’s TSMC in the race to develop the most advanced microchips, the company this week became the first chipmaker in the world to mass-produce sophisticated 3-nanometer microchips.

Before being employed in devices like mobile phones, the new chips will be used in high-performance computer applications. They will be smaller, more powerful, and efficient.

The information was released after the company’s declaration in May that it will invest 450 trillion won over the following five years to “fast-track the mass manufacture of semiconductors based on the 3-nanometer technique”.

Only two companies, Samsung and TSMC, produce the great majority of the most sophisticated microchips in the world, and both are currently operating at maximum capacity in an effort to address a global shortage.

Although it dominates the memory chip market, Samsung has been unable to keep up with TSMC in the advanced foundry sector.

The availability of memory chips has taken on geopolitical significance on a worldwide scale, with prominent states vying for sophisticated chip supplies.

That was proven in May when US Vice President Joe Biden paid a visit to Samsung’s vast Pyeongtaek chip plant to start off a trip of South Korea.

According to Biden, the Russian invasion of Ukraine has “further highlighted the necessity to secure our essential supply chains,” underlining the significance of advancing technological collaborations among “value-sharing” nations.

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