Samsung reported solid second-quarter earnings thanks to the strong performance of its chip division that offset relatively weaker performance from its consumer product divisions.
The South Korean tech giant said on Thursday that it posted 77.2 trillion won in revenue and 14.1 trillion won in operating profit during the quarter. The revenue figure is Samsung's highest to date for the second quarter while operating profit increased 12% from a year ago.
The Device Solutions Division, the company's name for its chip division, contributed 9.98 trillion won in operating profit, more than two-thirds of the total quarterly operating profit. Samsung said the company benefited from a favorable exchange rate and demand for memory chips from the server sector remained solid.
While demand for memory chips from consumer products weakened, the company maintained the sales price of its chips through a "disciplined sales strategy", the tech giant said.
Samsung said demand for memory chips from the server sector is expected to remain solid for the remainder of the year while those from PC and mobile will be weak, though year's end sales events could boost this.
Additionally, in foundry, or contract chip production, the company said it saw its highest revenue for the second quarter thanks to yield improvements, while highlighting that it became the first in the sector to start mass producing 3-nanometer chips.
Samsung's mobile business was the second largest contributor to the quarterly operating profit at 2.62 trillion won. The operating profit of the business declined slightly from a year ago but revenue increased thanks to strong sales of Galaxy S22 and Galaxy Tab S8, the company noted.
Geopolitical issues and concerns over inflation lingered during the quarter but supply disruptions of the first quarter were mostly resolved, Samsung said.
While economic uncertainties are expected to continue for the remainder of the year, the company said it will expand flagship sales by "successfully launching" new foldable models by offering better customer experiences. It will also focus on providing a richer, multi-device experience based on its SmartThings platform, Samsung added.
Meanwhile, Samsung Display, its display panel-making subsidiary, was the third largest contributor to total quarterly profit with 1.06 trillion won.
Despite the slowdown in demand for smartphones, the business unit improved its profits from strong sales of flagship smartphones by customers and the growing adoption of OLED panels from laptops and gaming devices.
Samsung's TV business however recorded its weakest quarterly operating profit in the past three years at 360 billion won, as demand dropped from last year's high which was caused by pent-up demand from the pandemic. Macro risks are expected to continue in the sector for the remainder of the year, the company said.