Just a few weeks back, Samsung was dealing with 50 million unsold smartphones in its inventory. Now they are reporting a record-breaking Q2 thanks to the skyrocketing sales of the Galaxy S22 series.
While 50 million in unsold inventory was a sign of the smartphone market slowing down in 2022 due to factors like inflation, it is worth noting that the majority of the inventory was made up of entry-level and midrange devices whose target market is much more sensitive to these factors as it directly affects their disposable income.
The Galaxy S22 series, on the other hand, operates in a premium segment where the target market has substantially more disposable income, meaning the current inflation has not really affected their spending habits. Couple this with Samsung offering good deals on trade-ins, mostly in the American and European markets, and the end result is a record-breaking Q2 for the South Korean company.
From its financial reports, the tech giant reveals the revenue from April – June 2022 was $59.2 billion, which is 21% more than it was for the same period in 2021. Furthermore, the operating profit for the same period stands at $10.8 billion, which is 12% more year on year. The strength of the US dollar against the Korean won also benefitted Samsung, raking in an extra $994 million in profit.
The South Korean company has also recorded exceptional performance for the same period in its System Semiconductor Business. In the released reports, Samsung says it has both expanded its product line up and increased the supply of chips to global customers.
“Earnings in the Memory Business improved both year-on-year and quarter-on-quarter as the Company focused on meeting solid demand for servers,” Samsung said.
TSMC and Samsung lead the rest of the world in the production of high-performance chips, with Samsung being the first of the two to start production on the 3-nanometre process earlier in June of this year.
The chips made on the 3 nm process will reportedly be more powerful and efficient, and will first be used in high-performance computing applications before being put into gadgets such as smartphones and tablets.
In regard to plans for the second half of the year, Samsung expects the macroeconomic uncertainties to persist, as a result, the DS Division (Device Solutions, which includes memory chips, semiconductors, and foundry processes) will focus on managing a portfolio of high-value-added products and expanding advanced nodes and new applications.
The MX Business (Mobile eXperience division, housing high-end smartphones) on the other hand, expect to post solid profitability with foldable products becoming mainstream as they set eyes on foldable sales surpassing that of the Galaxy Note series.
“The company aims to expand flagship sales by successfully launching new foldable models, driving the mainstreaming of the foldable products as a key category in the premium segment with better customer experiences through collaboration with global partners,” Samsung said.
In the computer segment, the company expects the demand for personal computers to stay weak in the second half of 2022, with the possibility of the weak demand spilling over to the enterprise segments.
