Samsung posted solid earnings for the second quarter, which analysts say are thanks to sustained demand for memory chips despite the drop in smartphone shipment.

The South Korean tech giant said on Thursday in its earnings guidance that it expects 14 trillion won in operating profit and 77 trillion won in revenue for the second quarter. It is an increase of 11.4% and 21%, respectively, from the same time period a year ago.

South Korean analysts are forecasting a strong performance from the company's chip division and a favorable exchange rate for the Korean won to have contributed to the growth.

Demand for memory chips from the server sector, which has propelled Samsung's growth for the prior three quarters, is expected to have continued through the second quarter.

However, Samsung's smartphone and TV operations are estimated to have reported lower sales due to inflation and the drop in demand for consumer electronics worldwide, analysts say.

According to Counterpoint Research, global smartphone shipment dropped 10% year-on-year to 96 million units in May, a significant drop caused by supply chain woes and demand returning to pre-pandemic levels.

The company is expected to announce its full earnings report at the end of this month.

Meanwhile, also on Thursday, LG Electronics also announced its guidance for the second quarter. The South Korean electronics maker said it expects 791.7 billion won in operating profit and 19.5 trillion won in revenue, a drop of 12% and an increase of 15%, respectively, from a year ago.

The company's profitability is also likely to have been affected by a drop in demand for consumer electronics and rising costs from inflation, analysts said.

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