What you need to know
- Samsung announced its financial earnings for the second quarter.
- The company set a record in the second quarter of the year amid weak smartphone sales compared to the previous quarter.
- The company expects continued “macroeconomic uncertainty” but remains focused on its upcoming product launches.
Samsung released a file Q2 Financial Profits (Opens in a new tab) This week, it posted record second-quarter revenue of KRW 77.2 trillion ($59.2 billion). While smartphones make up a large part of Samsung’s business, revenue was primarily driven by the company’s memory chips and record profits from its semiconductor business.
It’s a surprising turn of events given the persistent chip shortages that have crippled many industries. However, it also highlights the dependence on the cloud as companies increase the demand for chips to run their servers.
However, it wasn’t all rosy for Samsung’s second quarter, as the company reported a quarterly decline in MX Business, which is responsible for smartphone sales.
“Overall market demand decreased from the previous quarter amid geopolitical issues and concerns about inflation on top of continued weak seasonality, and profitability declined from the previous quarter somewhat due to higher component and logistics costs in addition to the negative effects of foreign exchange movements.”
Smartphone revenue increased year-over-year thanks to the latest Galaxy S22 and Galaxy Tab S8 models. However, the company expects smartphone sales in the second half of the year to remain similar to 2021, even with the launch of the upcoming foldable devices, citing “protracted geopolitical issues and economic uncertainties”.
This mirrors the sentiments of many other big tech companies like Alphabet, who are feeling the pressure of inflation.
Samsung and Qualcomm this week announced that they are extending their partnership until 2030, which indicates that more Galaxy devices will be powered by Snapdragon chips in the future. While Samsung will continue to build Exynos chips, its reputation hasn’t been great in the areas where the best Android phones run.
With rumors that the Galaxy S23 will be powered exclusively by Snapdragon across all regions, Samsung fans may have something to look forward to next year.