Samsung’s Q2 profit jumps on strong chip demand and mobile recovery

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Samsung Electronics Co Ltd on Thursday forecast strong demand for memory chips in the second half and a recovery in the mobile market to 2019 levels.

The world’s top maker of memory chips and smartphones posted a 54% jump in operating profit for the second quarter, its strongest result in more than two years, supported by high chip prices and better than expected demand.

The company cautioned that a global shortage of non-memory chips still poses a risk to forecasts, while uncertainties related to COVID-19 and geopolitical tensions are likely to persist.

Samsung pointed to strong fundamentals for the memory chip market on increasing 5G adoption and sustained demand for servers and PCs. It noted its chip inventory is “very low” after it shipped more chips than previously expected in the second quarter.

Samsung plans to unveil its next flagship foldable smartphone on Aug. 11, expected to be compatible with a stylus.

Samsung’s operating profit in the April-June quarter of 12.6 trillion won ($10.95 billion) was the company’s best result since the third quarter of 2018.

Mobile profits dipped from the previous quarter due to constrained supply of mobile processor chips and pandemic-related production disruptions.

Samsung’s shares fell 0.3% on Thursday afternoon, compared with a 0.2% rise in the wider market.

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