(Seoul) The South Korean giant Samsung Electronics announced Thursday an operating profit up 12.2% year on year in the second quarter of 2022, driven by record profits in its semiconductor branch.
Posted at 8:55 p.m.
The semiconductor sector “achieved a record quarterly profit,” the group said in a statement, adding that it had both increased production and expanded its product catalog.
“The benefits of memory activity have improved […]as the company focused on meeting the high demand for servers,” Samsung added.
In June, Samsung Electronics became the first manufacturer in the world to mass-produce advanced 3-nanometer chips, seeking to match and eventually surpass Taiwan’s TSMC in the race to manufacture the most advanced components.
The new chips will be smaller, more powerful and more efficient, and will be used in high-performance computing applications before later being integrated into consumer devices such as mobile phones.
The vast majority of the world’s most advanced microchips are made by just two companies, Samsung and TSMC, both of which are currently running at full capacity to fill a global shortage.
Between April and June, Samsung’s operating profit was 14.1 trillion won ($13.84 billion) on revenue up 21.3% to 77.2 trillion won, according to the press release.
Net profit (group share) reached 10.95 trillion won, up 15.9% year on year.
Decline in smart phones
Samsung, the world’s leading smartphone maker ahead of America’s Apple, said both demand and profits were down in the second quarter from the first quarter in that division.
“Aggregate demand declined from the previous quarter due to geopolitical issues and inflation concerns,” he explained.
“Profitability declined compared to the previous quarter, to some extent, due to higher component and logistics costs, as well as the negative effects of exchange rate fluctuations,” the group continued.
The weakness of the won against the dollar, however, benefited the company, which recorded a favorable foreign exchange effect of 1.3 trillion won compared to the previous quarter.
Memory chips have been at the center of global geopolitical tensions in recent months, with each state seeking to secure its supply at all costs. In May, US President Joe Biden symbolically embarked on a trip to South Korea by visiting Samsung’s giant semiconductor factory in Pyeongtaek, near Seoul.
Russia’s invasion of Ukraine has “further highlighted the need to secure our critical supply chains”, Mr. Biden said on this occasion, stressing the importance of strengthening technological partnerships between allied countries.