South Korea's Samsung breaks sales, profit records

Herbert Rhodes
July 27, 2017

Strong sales of its latest Galaxy S8 smartphone and increased demand for its memory have led Samsung to have a record second quarter.

Samsung also said its net profit soared 89 percent year-on-year to reach 11 trillion won ($9.88 billion) - a trillion won higher than estimated by Yonhap Infomax.

Indeed, nearly 60 percent of the company's quarterly income came from its semiconductor business, which recorded 8 trillion won in operating income from sales of 17.6 trillion won.

LG's earnings will likely fall in the second half of 2017 compared with the first as its appliances business enters a traditional off-season, analysts said.

Samsung Electronics said it expected the memory chip boom to continue in the current quarter. Trading volume was moderate at 420 million shares worth 5.3 trillion won (US$4.7 billion), with gainers outpacing losers 430 to 356.

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Samsung is reaping the rewards of dominating in the memory chip market which is growing much faster than the market for computers that rely on processing units dominated by Intel, said Chung Chang Won, a senior analyst at Nomura Securities.

Mobile devices and data are the keys to understanding Samsung's ascent as the new industry leader, even as its de facto chief is jailed, battling corruption charges, and it recovers from a fiasco over Galaxy Note 7 smartphones that had to be axed a year ago because they were prone to catch fire. Both Samsung and SK Hynix are expected to report all-time high profits this year. The company said that growth is slowing for products used in smartphones, but remains solid for servers.

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

The Journal said Apple has a projected net income of $8.2 billion for the three-month period, in what is traditionally a weaker quarter for the world's most-valuable company.

The company revealed an operating profit of 14.1 trillion South Korean won ($12.67 billion). "As these [cloud infrastructure] players grow, they will only need more chips and that helps Samsung".

Other reports by TheSundaySentinel

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