Coronavirus: Samsung profits soar on work from home demand

Drew Blackard, Samsung's U.S. mobile manager, speaks at Samsung's Galaxy UNPACKED in February 2020.

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Samsung Electronics has seen its earnings increase while sales have been increased by millions of people working and learning from home during the virus pandemic.

The world’s largest smartphone maker said second-quarter operating profits rose 23% from last year.

The results were aided by strong demand for computer chips, which pushed prices up the global market.

Data centers have expanded their ability to support work at home and school.

“The memory business saw strong demand for cloud applications related to remote work and online education as the impact of Covid-19 continued, while demand for mobile devices was relatively weak,” said the South Korean company.

Other major memory chip makers, including rival Korean manufacturer SK Hynix and the American company Micron Technology, have also been empowered by people who stay at home and consume Internet-based services such as video conferencing and movie streaming.

Last week, SK Hynix said that its operating profit had tripled in the second quarter compared to a year ago, as server operators ordered memory chips and prices rose.

In June, Micron Technology forecast higher-than-expected revenue this quarter due to strong demand for chips that power notebooks and data centers.

“Many companies are moving their operations to the cloud and the server computing segment is on the rise,” Prachir Singh, senior analyst at Counterpoint’s market research firm, told BBC.

Samsung, which will launch its new Galaxy Note and Galaxy Z Fold phones, has also predicted that the smartphone market will improve in the coming months and will see that it is becoming increasingly competitive.

New models

“The smartphone market is expected to witness intensified competition amid a gradual recovery in demand in the second half of the year,” he said.

Although Covid-19 causes low demand technology, brands continue to release new phones.

In April, Apple announced a new iPhone SE, relaunching a mid-range model that it had discontinued in 2018.

A week earlier OnePlus unveiled new models, while the previous month Huawei launched its flagship P40 range.

Meanwhile, Apple’s iPhone 12 and Google Pixel 5 and 4A are expected to be released later this year.

Samsung stocks were slightly higher in Seoul trading on Thursday and gained around 10% this week.

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