Samsung reports record quarterly profits

Sunday, 09 Jul, 2017

Memory chip prices have been on the rise since late past year as tight supply in DRAM and NAND flash memory have chip vendors scrambling to add capacity.

The success of the Galaxy S8 which launched in April also likely contributed to Samsung's record quarter.

Just this week, the firm announced plans to sink $18bn into its chip business as it attempts to solidify its place in the market.

"This is a better-than-expected performance", he added.

The earnings forecast surpassed a market consensus of around 13.2 trillion won compiled by FnGuide, a financial information service provider. When compared with the same period a year ago, this is an increase of 17.79 and 71.99 percent respectively.

"In July DRAM prices will go up again, while from mid-August on, OLED panels go out for Apple", HMC Investment analyst Greg Roh said.

South Korea's ruling party made a rare comment about Samsung Electronics Co.'s good second-quarter earnings Saturday, a gesture seen as a prod to get the world's largest manufacturer of smartphones to do more to revitalize the local economy.

He projects annual operating profits of 50 trillion won for 2017, up 70 percent from a year ago.

Shares of Samsung were unchanged at 2.361 million won as of 11:48 a.m.in Seoul. Earlier this week, Samsung said it planned to invest $18 billion in South Korea in its chip business to boost its lead in the market.

This would mark a 72 percent year-on-year increase and while the Galaxy S8 will have helped, a bigger chunk of the profits here actually comes from Samsung's display and chip manufacturing businesses. But analysts estimate the semiconductor division raked in over 8 trillion won in operating profit, or 57.1 percent of the total, as demand for DRAM and NAND flash storage chips exploded amid a global supply shortage.

The latest earnings figures signal that Samsung may have moved past the damage to its reputation caused by the Galaxy Note 7 recall.