Samsung reported consolidated revenue of KRW 77.2 trillion ($59.4 billion) for the second quarter of 2022. That was a record high for the quarter ended June 30. Samsung’s operating profit also reached KRW14.1 trillion ($10.8 billion). That’s a 12% increase over the same period a year earlier and the best performance since 2018.
As in previous years, the company’s semiconductor division, or Device Solutions (DS), was a big contributor to this performance, reaching an all-time high in quarterly revenue for the second consecutive quarter.
In the second quarter, the DS division reported consolidated revenue of KRW 28.5 trillion ($21.9 billion) and operating income of KRW 9.98 trillion ($7.7 billion), mainly due to demand for server chips. However, demand for smartphone and PC chips was much weaker than expected, “due to widening impacts of macro issues”. The fact is that Samsung stated that DRAM and NAND shipments were lower than predicted. The company also expects demand for consumer devices to remain weak, and even believes that this demand downturn could reach enterprises.
Samsung’s Mobile eXperience (MX) business also suffered from a general decline in market demand. The company blamed “geopolitical issues and concerns over inflation on top of continued weak seasonality” for the mobile division’s decline in revenue.
In addition, it said that costs for components and logistics have affected the profitability of the business and led to lower profits compared with the previous quarter.
Samsung does not expect smartphone sales to rise sharply next quarter either. Demand for new phones is likely to remain at the same level year over year or show only single-digit growth. Nevertheless, the company hopes that the launch of new foldable devices can boost sales figures in the coming months. Samsung will unveil its next-generation foldable phones at its upcoming Unpacked event on Aug. 10.
