Samsung second-quarter profit surges to record high on memory chip boom

Samsung second-quarter profit surges to record high on memory chip boom

This could also be the first time that Samsung beats the world's largest chipmaker Intel, which is predicted to post 16.4 trillion won in the second quarter.

Samsung said that despite the strong sales performance of premium smartphones, its total smartphone shipments remained at a similar level quarter on quarter, due to decreased sales of mid- to low-end products.

The clear standout business segment for Samsung was its semiconductor business, which increased its operating profit to 8 trillion won from 2.6 trillion won a year ago.

Apple, set to launch its 10th-anniversary iPhone this year, is still projected to notch up larger full-year profits than Samsung.

Several currency traders in Seoul said they suspected that foreign exchange authorities purchased dollars to temper the won's gains ahead of the closing bell.




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.

"But we also have to keep in mind that a lot of Samsung's momentum is from memory and displays too, so it's not all about the S8, either", he said, according to Bloomberg News.

For its other business segments, consumer electronics was down 1 percent in sales, and 68 percent in profit; while its display panel business saw its profit jump to 1.7 trillion won from 0.14 trillion won a year ago, and its sales increase 20 percent to 7.7 trillion won.

Just as Saudi Arabia dominates in oil output, Samsung leads in manufacturing the high-tech commodity of memory chips, which enable the world to store the data that fuels the digital economy. It also benefited from growth in LTE equipment sales. Samsung has said it plans to spend $18 billion in the next four years to expand memory chip production capacity at its South Korean plants. All of Samsung's products performed exceptionally well with its smartphone and memory divisions leading the charge.

Samsung said the semiconductor business was driven by strong demand for server memory and SSD storage while industry supply is limited, and expects demand to continue for the rest of the year.

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