Technology giant Samsung Electronics has said it expects the quarterly profits of the company to increase by 53% amid a global chip shortage that had affected the entire world of big-tech.
The largest memory maker and smartphone maker made a profit of $ 11bn (£ 8bn) in the three months to the end of June.
Impact Of The Pandemic
It said strong demand for memory chips compensated for the reduced sales of smartphone devices due to the shortages.
Last year, during the first few months of the COVID pandemic, Samsung saw its sales of products such as phones and TVs decline sharply.
Since then the demand for electronics has increased as people have started doing many of their daily tasks online with many chipmakers struggled to keep up with the increased demand.
The South Korean technology company’s view beats analysts’ expectations.
Surge In Profitability
If these figures are confirmed later this month, it will be a huge for Samsung as it would become the company’s largest second quarter profit numbers from 2018.
In recent months, chip makers in particular had a very strong ability to raise their prices due to the supply shortages.
In March, Samsung chief executive and mobile operator Koh Dong-jin told shareholders: “There is a huge imbalance in the supply and demand for chips in the IT sector worldwide.”
He also said the company is working with overseas partners to meet demand as the global shortage has created a supply chain disruption.
Global Chip Supply Shortage
The chip shortage has also hit hard the major car manufacturers around the world. They have been forced to stop production at various manufacturing plants.
Over the past few months, car companies including Ford, General Motors, Volkswagen and Jaguar Land Rover have all suspended their production schedules.
Last month, US President Joe Biden and European Commissioner Margrethe Vestager unveiled plans to build more computer chips in Europe and the US.
The move is one of the key to the transformation of the new Trans-Atlantic technology partnership known as The Trade and Technology Council.
The European Union wants to increase its global chip production market share from 10% to 20% and has pledged $ 150bn in this effort. Currently, the US has allocated $ 52bn for home chip production.
