Samsung Electronics reported a 146.7 per cent jump in third-quarter net profit as the semiconductor supercycle propelled the company to announce another round of record-breaking results. The South Korean tech giant expects its component business to continue to drive its earnings in the coming quarters as the memory chip market conditions are expected to remain favourable and sales of flexible OLED panels are expected to increase. Net profit in the July-September quarter surged to a record Won11.2tn from Won4.5tn a year earlier as sales jumped 30 per cent to Won62tn. Operating profit nearly tripled to Won14.5tn ($12.8bn). Memory chips were the main driver of earnings in the latest quarter, accounting for two-thirds of operating profit. The semiconductor division posted an operating profit of Won9.96tn, compared with Won3.4tn a year earlier, as the industry has hit a supercycle with demand for D-ram chips for mobile devices and servers outpacing supply. “Looking ahead to the fourth quarter, the company anticipates tight supply and demand conditions to continue for the memory business due to strong demand for servers and mobile devices,” the company said in a statement. The memory boom has boosted Samsung shares about 50 per cent this year as investors shrug off the ongoing leadership crisis and bet on the company’s strong outlook for next year. Operating profit at its mobile business reached Won3.29tn from just a Won100bn profit a year earlier, highlighting a full recovery from last year’s costly safety debacle of the Galaxy Note 7 phones. But the company is expected to face stiff competition from Apple for year-end holiday sales as Apple’s ultra premium iPhone X goes on sale on Friday. Operating profit at the display division remained steady at about Won1tn although LCD panel prices fell in the third quarter but the division’s performance is expected to improve in the fourth quarter and next year on stronger OLED demand. Samsung said it will nearly double its 2017 capital expenditure to Won46.2tn from Won25.5tn last year, spending the bulk of it on expanding memory chip facilities. About Won29.5tn and Won14.1tn will be spent on semiconductors and display panels respectively.
