Samsung Electronics defies pandemic with profit rise
"The overall turnover of the wider Samsung group is equivalent to a fifth of South Korea's gross domestic product."
South Korean tech giant Samsung Electronics defied the coronavirus to report higher net profits in the second quarter Thursday, with strong demand for memory chips overcoming the pandemic's impact on smartphone sales.
Long known as the world's biggest smartphone and memory chip maker, it said net profits rose 7.3 percent to 5.56 trillion won ($4.66 billion) in the April-to-June period.
The firm is the flagship subsidiary of the giant Samsung Group, by far the biggest of the family-controlled conglomerates that dominate business in the world's 12th largest economy, and it is crucial to the South's economic health.
The figures -- which beat expectations according to Bloomberg News -- come as the coronavirus pandemic wreaks havoc across the world economy, and with the trade-dependent South having entered a recession for the first time in 17 years due to plunging exports. But lockdowns imposed around the world -- especially in Europe and the US -- have boosted Samsung Electronics' chip business with data centres moving to stockpile DRAM chips to meet surging demand for online activities.
"Even as the spread of COVID-19 caused closures and slowdowns at stores and production sites around the world, the company responded to challenges through its extensive global supply chain," the firm said in a statement. It also minimised the impact of the pandemic by "strengthening online sales channels and optimising costs," it added. Operating profit rose 23.48 percent to 8.15 trillion won, it said, even as sales dropped 5.6 percent to 52.97 trillion won.
The overall turnover of the wider Samsung group is equivalent to a fifth of South Korea's gross domestic product. Analysts said they expect Samsung Electronics' memory chips and television businesses to improve.
Diplomatic and military tensions between India and China could also play in Samsung's favour, analysts said, if Indian consumers choose to shun Chinese brands and opt for Samsung devices instead.
"The growth is likely to drive by memory chips and displays as both of these products are in high demand due to heavy content consumption during the lockdown," Prachir Singh, a senior analyst at market observer Counterpoint, told AFP.
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