Vilnius: Samsung Electronics, a leading tech giant, reported a significant decline in its operating profit for the second quarter, which was primarily attributed to one-off costs in its semiconductor business.
According to Namibia Press Agency, the company's consolidated operating profit plummeted by 55.23 percent compared to the previous year, reaching 4.68 trillion won (3.4 billion U.S. dollars) for the April-June quarter. This figure fell short of market expectations, which had anticipated a profit of approximately 5.9 trillion won (4.2 billion dollars).
Revenue for the quarter saw a modest increase of 0.67 percent, rising to 74.57 trillion won (53.6 billion dollars). However, net income experienced a sharp decline of 48.83 percent, falling to 4.93 trillion won (3.5 billion dollars). The profit drop was largely due to inventory value adjustments in Samsung's memory chip business and one-off costs stemming from export restrictions affecting its non-memory business.
Samsung's chip-making division reported an operating profit of 400 billion won (287.6 million dollars) on revenue of 27.9 trillion won (20.1 billion dollars) during the second quarter. The company responded to strong server demand in the memory chip sector by boosting sales of high-bandwidth memory 3E (HBM3E) and increasing the proportion of high-density double data rate 5 (DDR5) products. Samsung anticipates sustained demand for artificial intelligence (AI) in the latter half of the year, driven by ongoing investments from major cloud service providers.
In its foundry business, the company plans to escalate the mass production of a new mobile system-on-a-chip (SoC) using the 2nm gate-all-around (GAA) process in the second half of the year. The display panel division recorded an operating profit of 500 billion won (359.5 million dollars) on revenue of 6.4 trillion won (4.6 billion dollars) for the quarter. Mobile display panel sales increased due to the introduction of new smartphones and expanded sales in the IT and automotive sectors. Additionally, large display sales saw growth in QD-OLED monitor displays, propelled by high demand in the gaming market.
Samsung projects an increase in mobile display sales in the second half, spurred by the launch of new smartphones, while aiming to maintain a steady supply of large display panels for TVs. The mobile phone and networks unit reported an operating profit of 3.1 trillion won (2.2 billion dollars) on revenue of 29.2 trillion won (21 billion dollars) during the quarter. Both revenue and operating profit showed growth from the same period last year, bolstered by strong sales of the Galaxy S25 series, Galaxy A series, and Galaxy tablets.
Looking ahead, Samsung plans to concentrate on the sales of foldable devices and the Galaxy S25 series in the second half, with an emphasis on enhancing the AI functionality of the Galaxy A series and strengthening the AI capabilities of tablets and wearables. The TV and home appliance segment posted an operating profit of 200 billion won (143.8 million dollars) on revenue of 14.1 trillion won (10.1 billion dollars). While sales of premium products improved, earnings were affected by increased competition. Samsung aims to bolster revenue growth in the second half by capitalizing on peak-season demand with high-value-added TVs featuring advanced AI capabilities.