Samsung's Q2 net profit hits record high

With leader jailed, Samsung reports record $9.7 billion profit

Samsung Electronics has reported an all-time high quarterly profit, thanks to booming demand for memory chips.

The home entertainment unit's operating profit improved 8.1 percent during the same period to 343 billion won while the revenue dropped by 3.8 percent.

On an annual basis, Samsung's semiconductor division is widely expected to overtake Intel's sales this year, analysts at brokerages and market research firms say.

Total sales grew 20% to 61 trillion won, driven by an increased demand for high-performance DRAM and NAND flash memory devices.

That performance means Samsung, which is the world's largest supplier of memory chips, should see semiconductor revenues greater than that of its rival chipmaker Intel Corp., which is due to report Thursday, if analysts' forecasts are correct.

Samsung said sales were led by its flagship Galaxy S8 smartphone, while sales of mid-range and low-end phones declined.




Coupled with tight supply conditions, the surge in demand drove up the prices of memory chips over the past year, allowing the world's two largest memory chip makers, Samsung and SK Hynix, to enjoy an unprecedented level of profitability.

The numbers appear to be in line with a report on expected profit they released on July 7.

"The S8 has indeed helped get Samsung back onto its feet, hopefully putting the Note7 debacle behind it", Bryan Ma, a technology industry analyst at IDC, said before the announcement.

"The company's strategic model going against Apple Inc's iPhone 8 and Samsung Electronics' Galaxy Note 8 in the second half of 2017 is expected to fall short, making it hard for mobile revenue growth".

Samsung said it has 54 trillion won in net cash, an 11 trillion won decrease from the same time a year ago. Its forecast for Q2 was $14.4 billion. 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.

The world's top maker of smartphones and memory chips also said net profit surged nearly 90 percent to 11.05 trillion won, its best quarterly result in five years.

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