Samsung Electronics reported a more than 12 per cent surge in second-quarter net profit, as well as record revenue during the period, as semiconductor sales hit a new high.
Profit at the world's largest mobile phone manufacturer in the three months ending June 30 rose to 14.10 trillion won ($10.82 billion) from 12.57tn won a year earlier, Seoul-based Samsung said in a statement on Thursday.
Consolidated revenue surged to 77.2tn won, an increase of more than 21 per cent compared to the same period a year ago, setting a new record for the second quarter.
Operating profit at Samsung's flourishing semiconductor unit surged about 44 per cent to 9.98tn won from a year ago, with revenue rising more than a quarter to 28.5tn won.
"The memory business’s performance improved both year-on-year and quarter-on-quarter as ASP [average selling prices] stayed at a better-than-expected level thanks to the disciplined sales strategy to meet market demand and the benefits of a strong dollar," Samsung said.
"Although server demand remained solid, demand for consumer products such as mobile weakened due to widening impacts of macro issues, resulting in DRAM [dynamic random access memory] and NAND shipments to come in below bit growth guidance," it added, referring to two of the most widely-used memory chips in the market.
Profit at Samsung's mobile division — which includes its flagship Galaxy smartphones — fell 19 per cent year-on-year in the quarter to 2.62tn won because of a decline in overall market demand amid geopolitical issues and concerns over inflation, which has been soaring to multi-year highs.
Revenue in the unit surged almost 30 per cent to 29.34tn won.
Samsung, which is scheduled to unveil the next iterations of its Galaxy Z foldables on August 10, expects demand in the smartphone market to "stay similar year-on-year or show single-digit growth" with prolonged geopolitical issues and economic uncertainties.
"The company aims to expand flagship sales by successfully launching new foldable models, driving the mainstreaming of the foldable products as a key category in the premium segment with better customer experiences through collaboration with global partners," it said.
Samsung's performance is expected to further temper investor fears about the semiconductor industry, which has been battling a supply crunch due to surging demand for electronics and supply chain disruptions.
However, the company's results were better than the projections it announced in its guidance earlier this month, which at the time kicked off a $30bn rally in the stocks of chip makers.
The chip market will reap about $639bn in revenue this year, clocking growth of 7.4 per cent, almost half the growth rate that the US research company forecast in May, when the revenue expectation was $676bn.
Samsung in May also announced that it will spend 450tn won over the next four years to boost its semiconductor and biopharmaceutical businesses as it tries to cope with Covid-induced supply chain disruptions and find new avenues to boost income.
The tech major expects demand for consumer products, including personal computers and mobiles, to stay weak in the second half of 2022, with the slump in the former possibly spilling over to enterprise segments.
However, it is banking on the holiday season towards the end of the year, when there are "chances of consumer demand getting stimulated".
Samsung is also planning to "exceed" revenue and profitability growth by expanding its line-up of 5G system-on-chips, which are used in electronics devices.
The company's mobile display unit posted profit of about 1.1tn won in the second quarter, down 17 per cent from a year ago. Revenue, however, improved more than 12 per cent.
In its visual display and appliances division, profit dived by about two thirds to 360bn won, but revenue improved more than 10 per cent annually to 14.83tn won.
Samsung's shares were up about 0.2 per cent at the close of trading in Korea.