28 July, 2017
Samsung Electronics on Thursday said it expected the memory chip boom to continue in the current quarter, after reporting a record operating profit for the three months through June.
Operating profit was up 72.9 percent from the previous year to 14.07 trillion won, while the firm's overall sales increased 19.7 percent to 61 trillion won.
For the mobile business, revenue increased 11 percent to 29 trillion won but profit fell by 3 billion won to 4 trillion won.
Visitors test Samsung Electronics Co.'s Galaxy S8 smartphones at a company shop in Seoul on July 27, 2017. Analysts forecast 10.1 trillion won in net profit according to financial data provider FactSet. That has brought about a supply shortage which is pushing prices even higher and widening profit margins.
The operating profit translates into Samsung earning 152.9 billion won every day over the April-June period, or 6.3 billion won per hour.
Manufacturers are packing more and more memory storage capacity into ever smaller mobile gadgets, as increased use of mobile applications, connected devices and cloud computing services drive up demand and consequently prices for memory chips, an area dominated by Samsung.
Almost 60 percent of Samsung's quarterly income was generated by its semiconductor division, which booked a record operating income of 8 trillion won ($7.2 billion) on sales of 17.6 trillion won ($15.8 billion). The figures come despite the falling seasonal demand for memory chips.
But its outlook on the semiconductor business remained rosy. Premium display panels - both OLED and LCD - led the growth with its OLED business delivering improved quarterly earnings thanks to increased shipments of flexible displays for smartphones.
In May, Samsung said it had sold over 5 million Galaxy S8 and S8 Plus units.
The Galaxy S8 series of smartphones recorded higher sales than their predecessors, helping the company's mobile business rebound from last year's crisis over Galaxy Note 7s that had to be recalled and eventually discontinued because they tended to overheat or catch fire. Samsung said the Galaxy S8 and the larger S8+ have outsold its predecessor, the Galaxy S7, "in nearly all regions".
"Greater use of smartphones and tablet PCs instead of computers is driving the rise of companies like Samsung", Chung said. Price changes in panels, however, led to a weakened profitability.
Samsung has announced its financial results for the second quarter of 2017. It is ramping up 64-layer V-NAND production at its Pyeongtaek fab to keep up with the growing demand.
The tech giant said it will also roll out a cash dividend worth 7,000 won per share.
Industry watchers, meanwhile, have expressed concern over Samsung's long-term strategy amid the absence of key figures from the company.
Shares of Samsung Electronics closed 0.08 percent lower at 2,490,000 won on the main bourse Thursday.
