India Broadband

India Broadband

Samsung Electronics Co., Ltd. today announced its financial results for the second quarter of 2006 (ended June 30, 2006). The company posted net income of 1.51 trillion won on revenue of 14.11 trillion won. Operating income for the second quarter was 1.42 trillion won. “During the second quarter, many companies in the same industry faced difficulties due to declining prices in mainstay products,” said Dr. Woosik Chu, senior vice president and head of Samsung Electronics’ investor-relations team.

“However, it’s noteworthy that operating profit exceeded market expectations amid a challenging market environment in the previous quarter? a result of our competitiveness and focus on innovation. We expect the second quarter to mark the trough and anticipate improvements in the second half of this year. Already, we saw market conditions for NAND flash, LCDs, and handsets stabilizing in the second quarter.” Operating profit of the Semiconductor Business reached 980 billion won on revenue of 4.42 trillion won in the second quarter. Operating profit dropped 12% in the second quarter from the first quarter, mainly due to a drop in NAND flash chip prices.

In the DRAM business, profit margins continued to improve in premium products, such as mobile and graphics, while prices for DDR1 and DDR2 were strong amidst difficulties by competitors to migrate to 90nm processing technology. Seasonality played a part in the price declines in the NAND flash memory market, however prices began to stabilize in the middle of May and conditions are expected to improve in the second half with rising demand.

Introduction of new products that require larger memory such as MP3s, PMPs, and handsets is expected to boost demand. In addition, conditions will improve with the seasonal demand pick up in the third quarter and migration to the finer process technology, in particular 60nm technology, will reduce manufacturing costs, boosting profitability. The Telecommunication Network Business posted revenue of 4.28 trillion won, and operating income of 405 billion won.