Samsung Elec says demand for chips to remain strong after Q2 profit rises - Reuters

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SEOUL, July 29 (Reuters) - Samsung Electronics Co Ltd (005930.KS) on Thursday forecast strong demand for memory chips and a recovery in demand for display panels due to new smartphone launches, after posting its highest quarterly operating profit in over two years.

"For the second half, market conditions are expected to be favorable for the component business," Samsung said in a statement, although it cautioned that "risks of continued disruptions in component supply and uncertainties related to COVID-19 are likely to persist."

Despite the risks posed by shortages of other semiconductors, it said the memory chip market's fundamentals remain strong on increasing 5G adoption, new smartphone model launches, and sustained demand for servers and PCs.

Samsung said its chip inventory has fallen to low levels as it shipped more chips than previously expected in the second quarter.

The world's top maker of memory chips and smartphones posted a 54% jump in operating profit in the April-June quarter to 12.6 trillion won ($10.95 billion), from 8.1 trillion won a year earlier, its best result since the third quarter of 2018.

Samsung said the outcome was buoyed by strong memory-chip prices and higher-than-expected demand from consumer electronics makers and data centre customers.

However, mobile profits dipped from the previous quarter due to constrained supply of mobile processor chips and production disruptions related to the coronavirus pandemic. read more

Net profit rose 73% to 9.6 trillion won. Revenue climbed 20% to 63.7 trillion won.

Samsung's shares were trading flat on Thursday morning, compared to a 0.3% rise in the wider market (.KS11).

($1 = 1,150.2300 won)

Reporting by Joyce Lee and Heekyong Yang; Editing by Richard Pullin

Our Standards: The Thomson Reuters Trust Principles.

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