registered Samsung Inc on Friday jumped 28 percent in its third-quarter operating profit to a three-year high, driven by higher memory chip prices and sales of new flagship smartphone screens.
The preliminary result rose by 26 percent from the second quarter. This is despite the fact that it is slightly below expectations.
The world’s largest smartphone and memory chip maker estimated its profits from July to September at 15.8 trillion won ($13.3 billion). It is the highest quarterly profit since the third quarter of 2018, when it posted a profit of more than 17.5 trillion won.
Analysts said higher memory chip prices and shipments, plus a jump in profitability in Samsung’s chip contract maker business, is likely to boost the chip division’s operating profit by about 79 percent from a year earlier.
Semiconductors accounted for about half of the company’s operating profit in the first half of the year. Earnings details are due later this month.
Analysts said that memory chip prices are expected to fall this quarter as demand for PCs declines amid an expected decline in global shutdowns that helped boost sales. While smartphone shipments may also decline.
The company’s chip manufacturing sector is expected to be a bright spot in the coming year. The company announced plans to start producing advanced designs for its 3nm chips in the first half of 2022.
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Samsung’s operating profit increased by 28 percent
Samsung competes against industry leader Taiwan Semiconductor Manufacturer TSMC to anticipate advanced technology and win over customers.
Analysts said the estimated sales of two million new foldable smartphones within a month, for the company’s mobile phone business, showed that demand for its foldable devices captured a larger portion of the mass market than last year.
However, this will likely be offset by marketing costs and higher component costs due to the global chip shortage.
Analysts also said that Samsung’s display unit likely saw strong results. Apple – the main customer – increased orders ahead of its late September launch of the iPhone 13 series.
Samsung said in a statement that total revenue was likely up about 9 percent compared to the same period last year. to a record high of 73 trillion won.
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