Samsung Q2 chip sales are $15.7bn

Posted July 27, 2017

Samsung Electronics posted its best quarterly profit in the second quarter due to a boom in memory chips.

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.

"We think more than KRW 15 trillion (in third-quarter profit) is more than possible", said analyst Greg Roh at HMC Investment & Securities. The results indicate that the unit is turning into another key money maker after semiconductors and smartphones.

Intel's more than two decade-long reign as the king of the silicon-based semiconductor is poised to end Thursday when South Korea's Samsung Electronics elbows the USA manufacturer aside to become the leading maker of computer chips.

Apple, which is due to report its financial results on Tuesday, is forecast to have booked 8.2 billion dollars in net profit during the three-month period, according to FactSet, during a typically slow season for the company.

It marks the highest quarterly operating profit ever posted by the tech giant.

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Increased uses of connected devices and mobile data have created strong demand for server memory to store, analyse and process data in data centres. That demand, coupled with a tight supply, has seen the price of memory chips shoot up over the past year, bringing an unprecedented level of profitability to suppliers such as Samsung.

Almost 60% of Samsung's quarterly income was generated by its semiconductor division, which booked eight trillion won in operating income on sales of 17.6 trillion won.

The company has also seen lower sales of its mid-range phones but a refresh of its Galaxy J series should be able to renew demand in the sector.

For the mobile business, revenue increased 11 percent to 29 trillion won but profit fell by 3 billion won to 4 trillion won.

This strong demand did lead to Samsung paying higher component costs but there was still a large increase in the earnings of its mobile division thanks to the release of the new Galaxy S8 and S8+. Ongoing projects such as the construction of an airport in Singapore, a thoroughfare in Australia and a semiconductor facility in Korea have helped prop up the unit's operating profit.