The Sales of Flash Memory Chips Help Boost Samsung’s Earnings
Samsung Electronics' semiconductor division has once again boosted the company's total earnings after showing good sales record in the second quarter. It has served as the main source of income since Q3 2014. Revenues and operating profit in Q2 have reached 48.5 trillion won and 6.9 trillion won respectively. The earnings were different from the first figures announced in the first week of July.
"Rising demand for high-capacity and high value-added semiconductors for use in smartphones and servers was the main reason", a spokesperson stated.
These days, most smartphone models come with high-capacity 64-128 GB NAND chips. The Galaxy S6, for instance, capture 5MB image files. This shows how mobile phones have greatly advanced. Gadgets like game consoles and tablets also feature large memory space to store large files, such as movies. As manufacturers release more advanced mobile devices and as servers rely on NAND flash memory for higher capacity, Samsung expects continued success for its semiconductors this quarter.
It has initially been predicted that smartphone sales would increase the company's revenue, especially with the rolling out of Galaxy S6. However, it looks like semiconductors have come out the best performers in the market. It has generated 3.4 trillion won operating profit in the second quarter, a feat the division hasn't achieved in five years. Since 2010, its operating profit has never gone above 3 trillion won.
While IT mobile lags behind semiconductors and Galaxy S6 sales were lower than expected, Samsung sees a steady recovery. The division's operating profit in Q2 is 2.76 trillion won, increasing by 20 billion won from Q1.
The company's spokesperson has acknowledged that they had problems meeting high demands for Galaxy S6 Edge. They hadn't expected consumers to prefer the curved edge of S6 Edge to the flat screen of S6. This error, along with a problem in production capacity, has kept them from keeping up with the demands on time. Plus, launching S6 has amounted to high marketing costs.