At the end of the first month of the third quarter, many companies rushed to sum up the results of the previous quarter, Samsung Electronics was among them. While preliminary data on the company’s revenue and operating profit were known in the first half of the month, it published detailed reporting only today. As it turned out, Samsung’s net profit soared sixfold to $6.96 billion.
Image source: Samsung Electronics
Analysts, meanwhile, explain Bloombergwere counting on only $5.8 billion in net profit. Previously, the company announced a 15-fold increase in operating profit in the second quarter to $7.6 billion, as well as a 23% increase in revenue to $53.5 billion. Such dynamics have been observed for the first time since 2021. Quite predictably, Samsung’s semiconductor business turned out to be the engine of growth. In this area, operating profit reached $4.7 billion, since the rise in memory prices in general was accompanied by an increase in demand for HBM-type chips. Revenue from the sale of the latter increased by more than 50% compared to the first quarter. Currently, HBM3E chips generate no more than 10% of Samsung’s core revenue. The company intends to supply this type of memory in the interests of several customers at once, but it categorically refuses to name them.
Samsung representatives declined to comment on recent rumors about receiving approval to supply HBM3 to Nvidia, citing strict contractual relationships with customers, but emphasized that by the end of the year they plan to increase the share of revenue from HBM3E supplies to 60% of all funds received in the HBM segment. Next year, the company plans to double the production volumes of HBM chips, and in the second half of this year, to increase them by 3.5 times compared to the first half of the year.
Samsung’s research and development spending rose 11% to a record $5.8 billion last quarter. The employee strike that began several weeks ago did not affect the rhythm of Samsung’s product output, as the management emphasizes.
The South Korean giant was forced to admit that this year, the supply of memory chips for the PC and smartphone segments will be limited, as priority will be given to the server segment in general and HBM in particular. Revenue in the smartphone segment, as Samsung expects, will grow, but mainly due to demand for expensive models with AI features, while demand in the entry-level price segment will slow down. The Galaxy S24 series continues to enjoy stable demand, as noted by Samsung representatives. The negative dynamics of revenue in the second quarter in the smartphone segment as a whole is due to seasonal factors, according to them.
In the second half of the year, demand for server components is expected to remain high, not only due to DDR and HBM, but also solid-state 3D NAND memory for storage devices. The company is ready to expand production of HBM3E in the second half of the year, and solid-state drives are also in high demand in the server segment.
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