Samsung Electronics and LG Electronics, two of Korea’s leading manufacturers, have announced unexpectedly strong earnings for the second quarter. Samsung Electronics reported robust earnings for Q2, driven by high demand for AI-based semiconductors. Samsung Electronics’ operating profit exceeded 10 trillion Korean won (KRW), significantly higher than the financial sector’s prediction of 8.3 trillion KRW. LG Electronics also posted record-high Q2 earnings, breaching the one trillion KRW mark for its operating profits amid the rebounding home appliances and TV market.
In a preliminary announcement, Samsung disclosed consolidated Q2 earnings of 74 trillion KRW in sales revenue and an operating profit of 10.4 trillion KRW. This figure is particularly notable, surpassing the total operating profit for 2023, which stood at 6.57 trillion KRW. Compared to the same period last year, sales revenue grew by 23.31%, and operating profit soared by 1452.24%.
Industry analysts attribute this success to a booming memory chip market fueled by surging AI demand amidst a recovering semiconductor market. Investors had estimated Samsung’s Device Solutions (DS) sector earnings for Q2 to be between 4 and 5 trillion KRW, but the actual results suggest the earnings might exceed 6 trillion KRW in the DS sector alone.
Similarly, LG Electronics achieved impressive results with consolidated Q2 sales revenue of 21.7 trillion KRW and an operating profit of 1.1961 trillion KRW. This represents a record high for Q2, with operating profit up by 61.2% and sales revenue increasing by 8.5% compared to the same period last year. The recovery in the home appliance market and rising global demand for premium OLED TVs, especially in Europe, contributed significantly to this earnings surge.
The rebound in the semiconductor market and growth in the electronics industry have also positively affected Korea’s current account. The current account surplus for May, announced on the same day, reached 8.92 billion US dollars (approximately 12.3 trillion KRW), marking a 20-month high. A 53% year-over-year increase in semiconductor exports led to an overall rise in exports, bolstering the national economy.
Do-Young Kwak now@donga.com
