Samsung earns record profit on surging semiconductor business

Sales of the S8 beat the S7 last year but higher component costs weighed slightly on Samsung's mobile profits

That's not the division where most of the profit originated, though, but rather Samsung logged a stellar quarter because of growing demand for its memory chips, OLED display panels, and other humble components it has been building capacity for in the last decade or so.

Net profit increased to KRW 11.05 trillion from KRW 5.85 trillion a year ago, as sales rose 20 percent to KRW 61.00 trillion.

Samsung's operating profit reached a record level of 14.1 trillion won, up 72.7 per cent.

On an annual basis, Samsung's semiconductor division is widely expected to overtake Intel's sales this year, analysts at brokerages and market research firms say. That demand, coupled with a tight supply, has seen the price of memory chips shoot up over the previous year, bringing an unprecedented level of profitability to suppliers such as Samsung.

Samsung also plans to expand its NAND chip plant in the Chinese city of Xian to meet booming demand for the chips used in high-end storage products, it said.

The firm's mobile division reported a 132 billion won loss, its ninth consecutive quarterly loss, hit by lackluster sales of its flagship G6 smartphone.


Another victor was the display panel unit, which saw operating profit jump twelvefold to 1.7 trillion won, topping 1 trillion won for the fourth consecutive quarter. Both Samsung and SK Hynix are expected to report all-time high profits this year.

"The S8 has indeed helped get Samsung back onto its feet, hopefully putting the Note7 debacle behind it", Bryan Ma, a technology industry analyst at IDC, said before the announcement.

The chip unit achieved this performance thanks to strong demand for high-density DRAMs and SSDs for servers in a low-supply environment.

Apple, which is due to report its financial results on Tuesday, is forecast to have booked 8.2 billion dollars in net profit during the three-month period, according to FactSet, during a typically slow season for the company.

The world's top maker of smartphones and memory chips also said net profit surged nearly 90 percent to 11.05 trillion won, its best quarterly result in five years.

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