Q2 Operating Profit Hits KRW14.1tn
Samsung Electronics reported on July 28 financial results for the second quarter ended June 30, 2022.
The company posted consolidated revenue of 77.2 trillion won, a record for the second-quarter, and operating profit of 14.1 trillion won, a 12% increase from a year earlier. The Device Solutions (DS) Division reported a historical high in quarterly revenue for the second consecutive quarter, while the Device eXperience (DX) Division posted a significant year-on-year revenue growth.
Earnings in the Memory Business improved both year-on-year and quarter-on-quarter as the company focused on meeting solid demand for servers under the disciplined sales strategy to meet market demand, helping to maintain average selling prices. The system semiconductor businesses (System LSI and Foundry Businesses combined) achieved a record high quarterly profit as System LSI expanded its product lineup while Foundry hit the company’s targeted yield trajectory for advanced nodes as it increased supply to global customers.
Samsung Display Corp. (SDC) saw record second-quarter revenue and operating profit for mobile displays driven by solid demand from major customers. Performance in the large panel business was weaker due to initial ramp-up costs of quantum-dot (QD) displays and a decline in LCD prices.
The Mobile eXperience (MX) Business posted a sequential decline in earnings as material and logistics costs rose, but revenue increased from a year earlier driven by sales of premium models. The Networks Business saw an increase in revenue from the previous quarter and added DISH Network as a customer.
Earnings in the Visual Display Business declined due to weak global TV demand, while the Digital Appliances Business posted a record high quarterly revenue for the second straight quarter as sales of Bespoke products expanded globally.
The strength in the U.S. dollar against the Korean won benefited the company’s component businesses, resulting in an approximately 1.3 trillion won company-wide gain in operating profit compared to the previous quarter.
In the second half, with macroeconomic uncertainties expected to persist, the DS Division will focus on managing a portfolio of high-value-added products and expanding advanced nodes and new applications. The DX Division will continue to reinforce leadership and product lineup in the premium segment.
In the Memory Business, server demand is expected to remain solid while PC and mobile demand is likely to see continued weakness. The Company will closely monitor the demand impact from various factors, such as new mobile product launches and focus on high-value-added and high-density product portfolio management.
The System LSI Business plans to expand the SoC business and strengthen the leadership position in image sensors. For the Foundry Business, the company aims to exceed market growth by adding new global clients while continuing to reinforce technological competitiveness through the development of the 2nd generation GAA process.
For SDC, earnings in the mobile panel business are expected to increase, driven by new smartphone launches and expansion into new application areas such as automotive and gaming. Earnings in the large display business are expected to improve as demand increases for QD displays.
The MX Business expects to post solid profitability with foldable products becoming mainstream as the Company targets foldable sales to surpass that of the Galaxy Note series. For the Networks Business, the Company plans to maintain momentum in revenue growth by expanding overseas businesses.
In the Visual Display Business, the Company will capture demand in the premium segment by boosting sales of strategic products, such as Neo QLED, Super Big and Lifestyle TVs. The Digital Appliances Business will focus on improving profitability by increasing sales of premium products.
The company’s capital expenditures in the second quarter were 12.3 trillion won, including 10.9 trillion won spent in the DS Division and 0.8 trillion won in SDC. Similar to the first quarter, spending on memory was concentrated on infrastructure at P3 and on process migrations at fabs in Hwaseong, Pyeongtaek and Xian. Investments in the Foundry Business focused on increasing production capacity of under 5-nanometer advanced processes.