Samsung Enjoys 46 Percent Profit Spike Thanks To Surging Semiconductor Chip Sales

Samsung has shown itself to be the quite the resilient force. Consider that it wasn’t all that long ago when Samsung’s mobile strategy had grown stale, causing a major shakeup among its higher ranks. Then more recently there was the embarrassing (and costly) Galaxy Note 7 gaffe. But despite it all, Samsung is coming off a quarter in which it posted its highest profit in three years.

Most of the credit belongs to Samsung’s semiconductor division. Sales of semiconductors (including memory) for the first quarter of 2017 rose 40 percent year-on-year to 15.66 trillion Korean Won (~$13.8 billion in U.S. currency), the highest it has ever been. Overall Samsung’s Q1 revenue reached 50.55 trillion Korean Won (~$44 billion), an increase of around 1.5 percent compared to the same quarter a year ago, with operating profit rising nearly 50 percent to 9.9 trillion Korea Won (~$8.7 billion).
Samsung was able to post impressive numbers despite what it deemed “tight” supply and demand for memory products in the first quarter. The company said it was able to improve earnings by increasing supply of mobile components for flagship smartphones. It also focused on supplying 48-layer V-NAND chips and high-density server DRAM, including LPDDR4 memory modules.

Things could have easily gone the other way for Samsung. In addition to the Galaxy Note 7 debacle, five of Samsung’s top executives were indicted on corruption and bribery charges as part of a political scandal that lead to the ousting of former South Korean president Park Geun-hye, who was recently arrested an jailed. Samsung’s de-facto leader and chairman Lee Jae-yong was among those indicted.

Despite the turmoil, the future looks bright for Samsung. It is coming off a quarter of red hot semiconductor sales and recently launched new flagship phones, the Galaxy S8 and Galaxy S8+, both of which are garnering high praise. On top of that, semiconductor sales are showing no signs of slowing down.