Samsung Memory Biz to Fuel Profit Surge

Javier Howell
July 9, 2017

The South Korean tech giant estimated its operating profit for April-June at 14 trillion won ($12.1 billion), up from 8.14 trillion won a year earlier.

Samsung shares slipped around 0.26% into the close of trading in Seoul to change hands at 1,889,000 won each, valuing the group at just over 348 trillion won ($300 billion).

Samsung - which accounted for more than 40% of global memory chip sales in the first quarter of this year - posted in April its biggest quarterly net profit in more than three years. Analysts expected 13 trillion won according to financial data provider FactSet.

Samsung on Friday released its unaudited profit and revenue figures for the second quarter.

Rumored second-quarter earnings suggest that Samsung is poised to overtake Intel as the world's largest semiconductor manufacturer.

Samsung may for the first time to circumvent Apple's quarterly operating profit.

Earnings were also bolstered by a strong reception for Samsung's latest Galaxy S8 phone, and by the company's display division, which produces the organic light-emitting diodes, or OLEDs, which are used in increasing numbers of displays.

Galaxy S8 shipments could top 15 million units this quarter, Tim Long, an analyst at BMO Capital Markets, told clients in a note Friday. The company's market value since the beginning of year has grown nearly on third - to 345,7 trillion won ($297 billion).

Results for Samsung's individual businesses were not given in the guidance.

The company commonly bankrolls its chip enterprises with more than $10 billion a year to lead the industry, outstripping such rivals as S. Korea's SK Hynix and Japan's Toshiba.

Analysts say a global shortage of chips may persist throughout 2017, driving prices higher and benefiting major suppliers such as Samsung and another South Korean chipmaker, SK Hynix. Out of 4.3 trillion won (US$3.72 billion), 3.3 trillion won (US$2.86 billion), or 76 percent, will come from Samsung Electronics.

Other reports by Insurance News

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