What you need to know
- Samsung reported its second quarter financial earnings.
- The company posted a record Q2 amid weaker smartphone sales compared to the previous quarter.
- The company expects “macroeconomic uncertainties” to persist but remains focused on its upcoming product launches.
Samsung released its Q2 financial earnings (opens in new tab) this week, reporting a 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 ongoing chip shortage that has hindered several industries. However, it also highlights the dependence on the cloud as companies drive higher demand for chips to power their servers.
That said, it wasn’t all rosy for Samsung’s Q2, as the company reported a quarterly decline in its MX Business, responsible for smartphone sales.
“Overall market demand declined from the previous quarter amid geopolitical issues and concerns over inflation on top of continued weak seasonality. Profitability decreased from the previous quarter at some degree due to rising costs of components and logistics as well as negative effects of foreign exchange movements.”
Year-over-year smartphone revenue increased thanks to its latest Galaxy S22 and Galaxy Tab S8 flagship models. However, the company expects smartphone sales in the second half of the year to remain similar to 2021, even with the upcoming foldables launch, citing “prolonged geopolitical issues and economic uncertainties.”
That echoes the sentiments of many other large tech companies like Alphabet, who are feeling the pressure of inflation.
This week, Samsung and Qualcomm announced an extension of their partnership until 2030, suggesting that more Galaxy devices will be powered by Snapdragon chips going forward. While Samsung will continue to build Exynos chips, its reputation hasn’t been great in regions where its best Android phones are powered by them.
With rumors that the Galaxy S23 will be powered exclusively by Snapdragon in all regions, Samsung fans may have something to look forward to next year.