Booming Galaxy S8 Demand And Semiconductor Sales Fuel Record Profit For Samsung

Three weeks ago, Samsung gave us guidance on its Q2 2017 earnings, claiming that it would have a blockbuster second quarter. Well, the official numbers are in and Samsung has made good on its claim. The South Korean company reported revenue of $54.8 billion (KRW 61.00 trillion) during the quarter and operating profit of $12.6 billion (KRW 14.07 trillion). 

Samsung partially attributed the healthy quarter to strong sales of its Galaxy S8 and Galaxy S8+ smartphones which launched in April to favorable reviews. According to Samsung, sales of the Galaxy S8 family have been tracking roughly 15 percent higher than the Galaxy S7 family (which launched in 2016).

However, profit did dip slightly (4.7 percent) for Samsung’s mobile division, with the electronics giant citing higher components for the erosion. On a side note, Samsung said that the Galaxy S8+ proved to be the most popular of the pair, accounting for over 50 percent of Galaxy S8/Galaxy S8+ sales totals.

Another bright spot on Samsung’s balance sheet was its components business, which saw revenue triple to $7.2 billion (KRW 8.03 trillion) compared to the same quarter last year. Samsung attributed the increase to strong sales of it DRAM for memory chips and NAND for SSDs.

Galaxy S8 And S8 Plus Front bottom3

“Looking at the second half outlook for NAND, Samsung expects strong industry demand from flagship smartphone launches and expansion of new datacenters, while restricted supply conditions will also remain,” wrote Samsung. “The company will focus on ramping up production of 64-layer V-NAND at its Pyeongtaek fab, and will seek to improve profitability by expanding sales of differentiated products such as V-NAND-based server SSDs.”

Samsung also experienced strength in its display business; not only with large panels used for televisions, but also with its OLED panels used in smartphones. The company is expecting a further increase in OLED panel sales during the second half (with Apple reportedly being a large customer with its upcoming iPhone 8), but profits will be constrained due to higher initial production costs.

Looking forward, Samsung has another big product launch coming up next month with the Galaxy Note 8. Samsung is looking for redemption following the fiery disaster better known as the Galaxy Note 7.

Top Image Source: Flickr (Nan Palmero)