Driven by strong memory demand for high-density DRAMs and SSDs for servers, Samsung Electronics posted revenue for the second quarter to be KRW 61.00 trillion, an increase of KRW 10.06 trillion year-on-year, while operating profit for the quarter was KRW 14.07 trillion, an increase of KRW 5.92 trillion year-on-year.
Samsung’s earnings significantly increased quarter-on-quarter thanks to the the strong sales of the Galaxy S8 and S8+ smartphones and the IT and Mobile Communications (IM) division posted KRW 30.01 trillion in consolidated revenue and KRW 4.06 trillion in operating profit for the quarter.
The Galaxy S8 and S8+ outsold the Galaxy S7 series in almost all regions, owing to the new Infinity Display design and enhanced features including water and dust proofing and iris recognition. The overall product mix also improved as the sales proportion of the Galaxy S8+ accounted for over 50 per cent of the total Galaxy S8 series.
However, despite the strong sales performance of premium smartphones, Samsung’s total smartphone shipments remained at a similar level quarter-on-quarter, due to decreased sales of mid- to low-end products.
In the second half, demand for smartphones and tablets is forecast to increase as the market enters a period of strong seasonality. However, competition is expected to intensify as new smartphone models are released by competitors. In response, Samsung will launch a new Galaxy Note with enhanced performance and features, to maintain the strong sales momentum of its premium smartphones, together with the Galaxy S8 and S8+.
For the mid- to low-end segment, Samsung will actively respond to demand from emerging markets and maintain profitability with enhanced products such as the Galaxy J series 2017 editions which are equipped with elegant metal designs, high-definition selfie cameras and specialized services such as Samsung Pay.
The display panel segment posted KRW 7.71 trillion in consolidated revenue and KRW 1.71 trillion in operating profit for the quarter driven by increased sales of premium OLED displays and high-end, large-size LCD panels.
For the OLED business, earnings improved quarter-on-quarter on the back of increased shipments of premium flexible displays for flagship smartphones while the LCD business saw profitability enhanced quarter-on-quarter mainly due to the increased sales of high-end, large-size UHD panels amid stable average selling price conditions.