Chip Business: Samsung Increases Sales and Profits

South Korean electronics group Samsung was able to increase its profit again in the second quarter of 2022. As in previous quarters, the chip business had the greatest impact on profit. Samsung posted a new record for second-quarter revenue of 77.2 trillion won. This is an increase of 21 percent year on year. Operating profit rose 12 percent to 14.1 trillion won, Samsung said on Thursday. The bottom line is that the group has 11.1 trillion won.

Again, the good business data that Samsung promised at the beginning of July once again shows that the Device Solutions (DS) division with its chip business is now a guarantee of increased sales and profits. According to Samsung, sales here from April to June 2022 were approximately 28.5 trillion won on a profit of 9.98 trillion won. Sales increased by a whopping 24 percent compared to the same quarter last year. Profit increased by 3.05 trillion won.

Despite the record in history, Samsung only describes the demand in the server area as “solid”. Due to the weaker overall economic situation, the demand for consumer goods such as smartphones has also decreased. Both would also have a depressed shipment of NAND and DRAM. According to Samsung, growth in both areas is below its own forecast. Samsung mainly benefited from the fact that the selling price remained high and the dollar appreciated, keeping the overall performance strong.

In the LSI system activities, revenues slightly increased. Responsible for this is the growing range of DDI and SoC, as well as the positive effects of exchange rate fluctuations. In addition, the world’s first delivery of 20-megapixel image sensors had a positive impact. Automotive SoC customers were acquired in Europe and the USA.

In the foundry division, Samsung achieved ‘highest sales ever’ and highest profit in the second quarter. Demand was stable. According to Samsung, the world’s first mass production of 3nm GAA chips, which began in June, has strengthened its own competitiveness.

In the second quarter, Samsung continued to see solid growth in the semiconductor business despite geopolitical uncertainty and inflation. The yield of the tokens is to be increased and the prices adjusted accordingly to achieve market growth. This also includes the development of ATM. Here, Samsung is looking to get more big customers in the US, Europe, Japan and Korea.

In the MX & Networks division, revenue grew 29 percent year-on-year to 29.34 trillion won. Operating profit is 2.62 trillion won, or 1.32 trillion won over the same quarter last year. Overall demand has decreased. The reasons are geopolitical problems and concerns about inflation and a seasonal decline. Profitability declined due to rising component and logistics costs as well as the effects of currency fluctuations. On the other hand, it was positively influenced by the fact that the supply interruptions were largely resolved in the first quarter. The top models in the Galaxy S22 and Galaxy Tab8 series saw a surge in sales, Samsung writes.

For smartphones, Samsung expects single-digit growth in the second quarter. Demand is likely to remain at the previous year’s level. Samsung, however, promises that the introduction of new foldable smartphones will increase the sales of its top models. On August 10, Samsung plans to present the successors of the foldable Galaxy Z Fold 3 and Galaxy Z Flip 4. In addition, Samsung will also present new models of Smartwatches.

Samsung’s display division is also in profits with sales of 7.71 trillion won and a profit of 1.06 trillion won. Here, sales growth was 12 percent higher year-on-year and profit increased by 0.22 trillion won.

Mobile displays sold well despite the overall reduced demand for smartphones. Top smartphones would drive sales here, had a positive impact on currency fluctuations. In addition, the increasing use of OLEDs in notebooks and gaming devices has increased the demand.

On the other hand, things are less rosy for large TV screens: losses have been incurred here due to lower LCD selling prices. The development costs of quantum dots (QD) displays also continue to be wasteful.

When it comes to smartphones, Samsung expects growth from new premium models in the second half of the year, so sales of mobile displays should be higher. Samsung, on the other hand, sees a shrinking notebook market but assumes that more of the more expensive OLEDs will be used.

Samsung also sees improvement in televisions. New TV sets with QD displays should appear on the market. This also applies to devices from the premium range. Samsung’s share price rose slightly on Thursday morning, the paper now costs 1,068 euros. In June, the price dropped to below 1,000 euros in some cases.


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