Samsung is successful in the crisis

Samsung remains on the road to success despite the COVID19 crisis and increased its profit by more than a fifth in the second half of the year.

Samsung Electronics posted an operating profit of 8.1 trillion won and sales of 52 trillion won in the second quarter of 2020, the company reports in its preliminary sales forecast.

Operating income increased 22.7% year-on-year, despite the company previously warning that demand for smartphones would decline sharply in the second quarter due to the COVID-19 pandemic.

The South Korean technology giant’s semiconductor business, which saw increased demand for its PC and server memory chips in the first quarter due to an increase in remote work, is likely to continue its strong performance in the second quarter. The prices for DRAMs also increased in the first half of the year, in particular due to the strong demand from servers.

The cellular and consumer electronics business from Samsung is likely to have developed better than expected in the USA and Europe, as some of the business there has reopened since the blocking measures were relaxed.

In fact, Samsung is even benefiting from falling smartphone sales. Samsung will probably also make a profit from a one-time contractual penalty in the second quarter, which the major customer, with the display business Apple has to pay because, due to lower iPhone sales than expected, a smaller number of OLED screens were installed than contractually agreed. Samsung received a similar payment from Apple in the second quarter of last year for not buying the minimum amount of screens required.

Although the COVID-19 pandemic is still not over, Samsung plans to launch new smartphones in the third quarter, while the demand for memory chips should remain stable for the rest of the year. The full quarterly report will be released later this month.

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