190131 Samsung
Samsung. Image Credit: Bloomberg

Seoul: Samsung Electronics Co Ltd said on Thursday it expects a gradual recovery in demand for mobile devices and consumer electronics in the second half of the year, but risks remained due to coronavirus pandemic and growing competition.

Samsung posted a 23 per cent jump in operating profit in the April-June quarter on the back of a 13 per cent surge in DRAM memory chip prices. Chip demand largely came from data centres bulking up to support a work-from-home economy and growth in online learning.

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Memory-chip makers including SK Hynix and US firm Micron Technology Inc have also flagged increased demand from this trend.

Samsung’s operating profit in the second quarter rose 8.1 trillion won (Dh25 billion), from 6.6 trillion won a year earlier, in line with the company’s estimate earlier this month.

Revenue at the world’s top maker of memory chips and smartphones dropped 6 per cent to 53 trillion won. Net profit rose 7 per cent to 5.6 trillion won.

Samsung said a one-off gain at its display business helped boost its profit, without elaborating further. Samsung’s display business counts Apple Inc as a customer.

With stockpiles fuller, Samsung’s data centre customers are expected to buy fewer DRAM chips in the second half of the year, arresting the price rise, analysts said.

Samsung is expected to launch the latest version of its flagship Galaxy device and another pricey foldable phone this year.

Its shares rose 1.6 per cent in early trade on Thursday, ahead of a 0.7 per cent gain in the wider market. The company’s shares have rallied recently, joining rival TSMC, from growing expectations that they may benefit from Intel Corp’s plan to outsource more chip manufacturing.