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People wear masks in front of a Samsung store in a prominent shopping center in downtown Shanghai, China, on February 21, 2020, as the country is plagued by an outbreak of the novel coronavirus. Aly Song/File Photo/REUTERS SEOUL, South Korea, July 6 (Reuters) – Strong chip pricing and demand fueled by a pandemic-driven consumer desire for electronics, as well as rising investment in data centers, helped Samsung Electronics Co Ltd (005930.KS) likely see a 38 percent increase in earnings for the April-June quarter. According to a Refinitiv SmartEstimate compiled from 20 analysts and weighted toward those who are more consistently correct, operating profit for the world’s largest memory chip and smartphone producer likely increased to 11.3 trillion won ($10 billion). Despite delivering fewer smartphones in January-March, the South Korean tech giant’s outstanding performance highlights the sky-high demand for semiconductors, which has drained stocks and filled production capacity. The result would be a 20 percent increase over the first quarter and Samsung’s greatest second-quarter operational profitability since 2018. Revenues are expected to increase by 15.4 percent. On Wednesday, Samsung is expected to release preliminary second-quarter earnings. Analysts believe the company’s semiconductor division profited from memory chip price hikes that exceeded market expectations, as well as increased shipments. According to Trendforce, prices of DRAM chips, which are commonly used in servers, mobile phones, and other computer devices, increased by 27 percent in the March quarter, while prices of NAND flash chips, which serve the data storage sector, increased by 8.6 percent. Analysts added that profit at Samsung’s chip-contract manufacturing and logic chip design businesses improved as well, owing in part to the restoration to normalcy of operations at the company’s storm-damaged Texas factory. They projected that the chip division’s operational profit in April-June increased by around 22% year on year to about 6.6 trillion won. Samsung’s smartphone shipments fell to around 59 million in April-June from around 76 million in the first quarter, according to Shinyoung Investment & Securities, as sales of the company’s current flagship model, which was released in mid-January, slowed. Analysts estimate the mobile business’ operating profit to be around 2.9 trillion won, owing to lower demand from India, which was heavily hit by the epidemic during the quarter, as well as restricted supply for several mobile processor chips. (1 USD = 1,129.2800 KRW) Joyce Lee contributed reporting; Heekyong Yang contributed additional reporting; and Sayantani Ghosh and Christopher Cushing edited the piece. The Thomson Reuters Trust Principles are our standards./nRead More

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