| Samsung Electronics Vice Chairman Lee Jae-yong, second from right, walks with executives during his visit to the company's Onyang semiconductor plant in Asan, South Chungcheong Province, Thursday. / Courtesy of Samsung Electronics |
By Baek Byung-yeul
Samsung Electronics said it is expecting to show better performance in the second half of this year as it is betting big on recovering demand for its smartphones and memory chips despite the COVID-19 pandemic, the tech giant said Thursday.
Emphasizing that the tech giant is betting big on growing demand for chips, Samsung Electronics Vice Chairman Lee Jae-yong visited the firm's Onyang semiconductor factory in Asan, South Chungcheong Province, Thursday.
During his site visit, Lee inspected Samsung's technology development roadmap for its next-generation chip packaging technology and had a meeting with employees there. Packaging technology is an essential part of the chip manufacturing process, enabling electric connection between integrated circuit chips to the circuit board.
The Onyang plant is in charge of the last phase of chip-making processes, ranging from packaging development to production and inspection. Once the company produces its chips at plants in Yongin, Hwaseong and Pyeongtaek, the products are carried over to Onyang for the final phase of the chip-manufacturing process called back-end processing.
"This is Lee's second visit to the Onyang factory since his first visit in August 2019. He inspected the company's next-generation chip packaging technology which will be used to produce 5G network modules and high-bandwidth memory chips," a Samsung official said.
"We have to occupy the future of the post-COVID-19 era. There is no time to hesitate. We have to leap forward," the vice chairman said.
Despite negative factors due to the virus pandemic, Samsung was able to minimize the impact in the April-June period, posting better-than-expected sales and operating profit.
In a statement released Thursday, Samsung said its second-quarter operating profit came to 8.15 trillion won ($6.82 billion), up 26 percent from the previous quarter and 23 percent from a year earlier.
"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, while minimizing the impact of the pandemic by strengthening online sales channels and optimizing costs," it said.
In the chip business, which accounted for 66.6 percent of its entire operating profit in the second quarter, Samsung said its memory chip business enjoyed robust demand thanks to the rise in remote working and online education practices as the pandemic continued. Samsung posted 18.23 trillion won in sales and 5.43 trillion won in operating profit.
"Looking to the second half, overall demand for DRAM is expected to pick up from new smartphone launches," the firm said in a statement. "The likelihood is solid server demand continues in the second half, but server customers' inventory and investment plans still must be closely scrutinized."
While risks remain due to the pandemic and growing competition, Samsung said it expects "a gradual recovery in demand for mobile devices and consumer electronics" in the second half of this year.
"The Mobile Communications Business plans to unveil new flagship smartphones including the Galaxy Note and a foldable phone, while seeking to expand sales of mid-tier models. The smartphone market is expected to witness intensifying competition amid a gradual recovery in demand in the second half of the year," it said.