Samsung Electronics’ semiconductor business, which has been a key driver of the company’s profits in recent years, has returned to profitability thanks to a rebound in memory-chip prices. The South Korean tech giant reported a 38% increase in operating profit in the second quarter of 2021, driven by strong demand for its memory chips.
The semiconductor industry has been facing challenges in recent years, with oversupply leading to a decline in prices. However, the situation has started to improve, with demand picking up as economies around the world recover from the impact of the COVID-19 pandemic. This has helped boost prices for memory chips, which are used in a wide range of electronic devices, from smartphones to data centers.
Samsung’s semiconductor business has been a major contributor to the company’s profits in recent years, but it faced a tough period in 2019 and 2020 as prices for memory chips plummeted. The company responded by cutting costs and investing in new technologies to stay competitive. It also benefited from the shift to remote working and online learning during the pandemic, which drove demand for devices like laptops and tablets.
The rebound in memory-chip prices is welcome news for Samsung, which has been looking to diversify its revenue streams and reduce its reliance on its smartphone business. The company has been investing heavily in new technologies like 5G and foldable displays, but its semiconductor business remains a key driver of profits.
Samsung’s strong performance in the semiconductor market is also good news for the broader tech industry, as the company is a major supplier of memory chips to other manufacturers. A healthy semiconductor market benefits not only Samsung but also its competitors and customers.
Looking ahead, Samsung is expected to continue investing in new technologies and expanding its presence in the semiconductor market. The company has announced plans to invest $151 billion in its semiconductor business over the next decade, with a focus on advanced chip technologies like AI and 5G.
Overall, Samsung Electronics’ flagship semiconductor business has returned to profitability thanks to a rebound in memory-chip prices. The company’s strong performance in this key market is a positive sign for the tech industry as a whole, and bodes well for Samsung’s future growth and profitability.