Samsung’s profits are up despite COVID-19 pandemic

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Samsung posted better than expected earnings for the second quarter of 2020, with operating profit up 23 percent year-on-year to 8.15 trillion won ($6.84 billion) despite a 6-percent fall in revenue. The Korean conglomerate says it experienced a greater recovery from the impact of COVID-19 than it had initially forecast and managed to optimize its expenditure, even though sales of devices like smartphones were down from last year.

Samsung expects smartphone sales to rise next quarter due to the launch of the Galaxy Note 20 and an unnamed foldable phone, likely the leaked Galaxy Z Fold 2. Its display business, which supplies panels for other device makers, saw demand fall but had earnings boosted due to a “one-time gain.” This is understood to be a compensatory payment from Apple after the US company ordered fewer iPhone panels than expected; Bloomberg notes that analysts peg the amount at about 1.1 trillion won ($924 million).

Samsung’s all-important chip business is seeing mixed results during the pandemic. The shift to working from home means demand is strong for DRAM used in data centers and PCs, but down in mobile devices. It’s a similar story with NAND, where server SSD sales are growing as cloud usage rises, but slumping smartphone sales mean overall storage shipments are down. Still, the semiconductor division overall accounted for two-thirds of Samsung’s operating profit for the quarter.

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