Chip demand is strong! Samsung Electronics' Q2 operating profit jumps 23% in 2020

According to a Reuters report, Samsung Electronics’ financial report released today (7) shows that operating profit in the second quarter of this year surged by 23%, exceeding analysts’ expectations. This was mainly due to the strong demand for data centers during the epidemic period due to remote office and education As a result, chip sales and DRAM prices have increased.

Samsung said that chip sales offset the weakness in the smartphone and TV business, while the one-time revenue from the display business also boosted profits. The operating profit for the quarter ending in June is expected to reach 8.1 trillion won ($6.8 billion), much higher than the 6.4 trillion won estimated by Refinitiv SmartEstimate analysts, which will be the highest quarterly profit since the fourth quarter of 2018 .

Samsung’s preliminary information released today is limited, with no net profit and other financial details, and it is expected that detailed financial reports will be announced by the end of this month.

Industry analysts believe that Samsung Electronics’ performance in the third quarter is expected to improve further, with sales and operating profit expected to exceed 60 trillion won and 9 trillion won in the third quarter.

However, some insiders have warned that the price increase of memory chips may not continue in the second half of this year. As the epidemic gradually eases, data center customers may hold a conservative attitude towards memory chips. According to data from DRAMeXchange, although DRAM prices rose by 14% throughout the second quarter, prices in June were basically the same as those in May.

In addition, the second spread of the epidemic may delay economic recovery, coupled with the influence of uncertainties such as Sino-US conflicts, it is not yet certain whether Samsung's performance will improve in the second half of the year.

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