Samsung Q2 profit rises 23% despite COVID-19

Samsung Electronics has posted operating profit of 8.1 trillion won and revenue of 52 trillion won in the second quarter of 2020, the company said in its preliminary earnings guidance on Tuesday.

Operating profit rose 22.7% year over year despite the company previously warning that demand for smartphones would drop sharply in the second quarter due to the COVID-19 pandemic.

The South Korean tech giant's semiconductor business, which saw increased demand for its memory chips from PCs and servers in the first quarter due to a surge in remote work, is likely to continue its strong performance in the second quarter.

DRAM prices have also been on the rise in the first half of the year, especially due to strong demand from servers.

Samsung's mobile and consumer electronics businesses are also likely to have fared better than expected in the US and Europe as stores there have partially reopened since the easing of lockdown measures.

Samsung's display business is also expected to turn a profit for the second quarter from a one-time penalty paid by major OLED client Apple from lower than expected iPhone sales. The company received a similar payment from Cupertino in the second quarter last year from the latter not buying the required minimum batch of display panels.

Though the COVID-19 pandemic still looms, the company is planning to launch new smartphones in the third quarter while demand for memory chips is expected to remain firm throughout the rest of the year.

Full earnings will be announced later this month.

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