- Revenue soars 23.4% while net income more than quintuples on strong semiconductor business and display panels.
- Galaxy S24 series experienced a significant uptick, showing double-digit growth in both shipments and revenue compared to its predecessor.
- Samsung expects continued growth in the second half of 2024.
South Korea’s tech giant Samsung Electronics saw its second quarter operating profit surge more than 10 trillion won for the first time in seven quarters since the third quarter of 2022.
Its operating profit surged more than 15 times to 10.44 trillion won ($7.6 billion) in the Apil-June quarter compared to 668.5 billion won ($484.1 million) a year ago on the robust performance of its semiconductor business and display panels.
Samsung’s total revenue soared by 23.4 per cent year-on-year, reaching 74.07 trillion won ($53.6 billion). Net income also experienced a dramatic increase, more than quintupling to 9.84 trillion won ($53.6 billion).
The positive performance was largely driven by favourable market conditions in the memory chip sector, which elevated average sales prices, coupled with strong OLED panel sales.
The semiconductor business emerged as a key driver of growth, reporting an operating profit of 6.45 trillion won ($4.7 billion) on revenue of 28.56 trillion won ($4.7 billion) on revenue of 28.56 trillion won ($20.7 billion).
Smartphone sales soar
Demand for high-bandwidth memory (HBM), conventional DRAM, and server SSDs surged due to ongoing investments in artificial intelligence (AI) by cloud service providers. Additionally, the increased demand for AI applications from businesses is continuously fueling this sector.
The higher supply of systems on chips (SoCs), image sensors, and display driver integrated circuits (DDIs) further bolstered the semiconductor division’s earnings.
In the display panel segment, Samsung reported an operating profit of 1.01 trillion won ($731.4 million) from revenues of 7.65 trillion won ($5.5 billion).
The growth in mobile display panels was supported by strong demand for flagship products and a stable supply of IT OLED products.
Furthermore, there was a notable expansion in sales of large display panels driven by increased demand for high-resolution and high-refresh-rate monitors within the gaming sector, alongside the rising adoption of OLED technology in the television market.
Beyond semiconductors and display panels, Samsung’s mobile phone and networks division recorded an operating profit of 2.23 trillion won ($1.6 billion) on revenues of 27.38 trillion won ($1.6 billion) on revenues of 27.38 trillion won ($19.8 billion).
Despite a seasonal decline in overall smartphone demand, the Galaxy S24 series experienced a significant uptick, showing double-digit growth in both shipments and revenue compared to its predecessor.
Projections for the second half of the year indicate a potential upswing in smartphone demand, driven by AI-enhanced premium products and the introduction of innovative new devices.
Capex jumps
The TV and home appliance division also reported a profit of 490 billion won ($354.8 million) on revenues of 14.42 trillion won ($354.8 million) on revenues of 14.42 trillion won ($10.4 billion).
The increased demand for televisions, particularly due to global sporting events, is expected to continue into the second half of 2024, spurred on by a heightened interest in QLED, OLED, and larger screen televisions.
Samsung is poised for continued growth in the latter half of 2024, as its capital expenditures for the second quarter reached 12.1 trillion won ($8.8 billion), with substantial investments in both semiconductor and display panel units.
The company anticipates a strong recovery in demand across various segments, propelled by the convergence of AI technologies with consumer devices, which is likely to enhance the appeal of its premium offerings.