Samsung Electronics turned in its best April-June profit since 2018 with an 11 percent year-on-year rise, as lingering demand for its memory chips from server customers offset lower sales from inflation-hit smartphone makers.

The world's largest memory-chip and smartphone maker said on Thursday its second-quarter operating profit rose to 14 trillion won ($11.2 billion) from 12.57 trillion won ($10 billion) a year earlier.

Revenue likely rose 21% from the same period a year earlier to 77 trillion won, Samsung said in a preliminary earnings release, in line with market expectations. Samsung is due to release detailed earnings this month.

Samsung's chip profits were shielded last quarter from what analysts think is a looming glut after high demand in the past two years, even as large U.S. tech firms that use a lot of data center services kept buying chips to meet cloud demand.

Meanwhile, expectations from another chip giant is also positive. Taiwan Semiconductor Manufacturing (TSMC) previously estimated its net revenue will be $17.6 billion to $18.2 billion in second quarter, higher than the $17.57 billion in the first. Its revenue in April and May continuously rose to $5.8 billion and $6.3 billion, respectively. TSMC will report its Q2 performance on July 14. 

But analysts say that chipmakers worldwide are facing cooling demand after two bumper pandemic years, when people bought devices to work remotely. 

Rising inflation, concerns about a downturn in major markets, Russia-Ukraine conflict and COVID-19 outbreak in China have resulted in slowing smartphone sales, leaving server chip demand as the only bright spot, analysts said.

(With input from Reuters; Cover via CFP)