SEOUL (BLOOMBERG) – Samsung Electronics’ profit for the second quarter beat analyst estimates thanks to rising memory prices and the recovery of its Austin chip foundry.

South Korea’s largest company posted net income of 9.45 trillion won (S$11.1 billion) for the three months ended June, beating an 8.7 trillion won average of estimates compiled by Bloomberg. Samsung disclosed preliminary numbers earlier this month that showed operating profit rose more than 50 per cent. The company also reported a one-time gain in its display business.

Data centre operators and personal computer makers have pushed memory prices up as they rush to secure inventories in the wake of a chip shortage and growing demand for services and hardware at home. Despite a slump in phone shipments, partly due to supply chain disruptions in Vietnam, Samsung maintained profitability with more frugal digital marketing and robust sales of its tablets and wearable gadgets.

“Although smartphone demand contracted globally due to chip shortages and the spread of Covid-19 in India, memory shipments and prices rapidly increased from server clients that helped improve earnings,” said HMC Securities senior vice-president Greg Roh.  “A one-time gain from a North America-based client in display and a price increase in mobile OLED products were also positive factors.”

The non-memory chip business, called system LSI and foundry, reported improved earnings, helped by Samsung’s Austin fab coming back online after a statewide power failure in Texas, according to Daishin Securities analyst Lee Su-bin.

“The anticipated increase in chip shipments is projected to lead to improved profitability” in the second half of the year, she said.