Samsung Electronics reported Thursday its net profit grew 7.3 percent year-on-year in the second quarter, with strong demand for memory chips overcoming the impact of the coronavirus pandemic on smartphone sales.
The world’s biggest smartphone and memory chip maker said profits in the April-to-June period were 5.56 trillion won ($4.66 billion), reports BSS/AFP.
Operating profit rose 23.48 percent to 8.15 trillion won, even as sales dropped 5.6 percent to 52.97 trillion won. The firm is the flagship subsidiary of the giant Samsung Group, by far the biggest of the family-controlled conglomerates that dominate business in the world’s 12th largest economy, and it is crucial to South Korea’s economic health.
The figures come as the coronavirus pandemic wreaks havoc across the world economy, with the South having entered a recession for the first time in 17 years as exports plunged due to the outbreak.
The South is highly trade-dependent and exports plunged 13.6 percent year-on-year in Q2 — the sharpest decline since 1974. But lockdowns imposed around the world in the face of the pandemic — especially in Europe and the US — have boosted the firm’s chip business with data centres moving to stockpile DRAM chips to meet surging demand for online activities.
“Even as the spread of COVID-19 caused closures and slowdowns at stores and production sites around the world, the company responded to challenges through its extensive global supply chain,” the firm said in a statement.
It also minimised the impact of the pandemic by “strengthening online sales channels and optimising costs,” it added.
Samsung’s overall turnover is equivalent to a fifth of South Korea’s gross domestic product.
‘Pent-up demand’
Analysts said they expect the firm’s memory chips and television businesses to improve. Diplomatic and military tensions between India and China could also play in Samsung’s favour, analysts said, if Indian consumers choose to shun Chinese brands and opt for Samsung devices instead.