Samsung gave this July 7 a first glimpse of its results for the second quarter of 2022. According to figures released by the South Korean company, its profit stabilized compared to the previous quarter. This slightly beats the company’s initial forecast, which expected much worse. Shareholders are delighted with this news, made possible by the significant sale of chips. However, the end of the quarter was marked by a sharp drop in demand.
Results that hold for Samsung
This quarter, Samsung’s results once again come against the backdrop of supply chain disruption. Inflation has also reduced consumer demand. Investors expected worse, but Samsung has been able to play to its strengths in the chip sector to maintain itself. The South Korean manufacturer has sufficient stocks to meet demand, particularly in memory chips, used for servers in data centers.
Although the company has not yet shared its results in detail, its business related to the sale of electronic components accounts for 60% of its total profit. This quarter, it would amount to 10.86 billion dollars, against 9.6 billion dollars the previous yearan increase of 12% in Samsung’s profit.
On the turnover side, it would reach 59.2 billion dollars. An increase of 22% compared to last year, when it weighed 55.2 billion dollars. As an indication, the sale of chips had generated $19.7 billion in the second quarter of 2021 and $26.87 billion in the first quarter of the current year. A substantial increase linked to the rise in the price of chips in the midst of a shortage. This amount should therefore be maintained for the company’s final results, which will be released in July.
The consequences of inflation are beginning to be felt
Analyst Sanjeev Rana, for investment group CLSA, told CNBC that he expected a 19% increase in turnover related to the sale of chips. According to him, this is due to the diversity of chips manufactured by Samsung. The company manufactures components for servers, smartphones, laptops and different types of semiconductors.
Despite these pleasing results for the firm, the end of this quarter is marked by a significant slowdown which could worsen in the future. The consequences of the war in Ukraine are manifold. Inflation drives up the prices of materials to make semiconductors. By extension, consumer demand for high-tech products is falling sharply. Faced with this situation, the company had already announced that it wanted reduce own production of smartphones.