Samsung earns record profit on surging semiconductor business

Visitors test Samsung Electronics Co.'s virtual reality devices at a company store in Seoul

Visitors test Samsung Electronics Co.'s virtual reality devices at a company store in Seoul

The result beat expectations.

South Korean tech giant Samsung Electronics posted record-breaking earnings Thursday, putting it on course to better rival Apple's quarterly profits as it seeks to move past a bribery scandal and a damaging recall debacle. The results indicate that the unit is turning into another key money maker after semiconductors and smartphones.

The South Korean won finished at a four-month high on Thursday as the dollar sagged after Federal Reserve seemed less confident about raising interest rates due to sluggish USA inflation.

The Journal said Apple has a projected net income of $8.2 billion for the three-month period, in what is traditionally a weaker quarter for the world's most-valuable company.

Increased uses of connected devices and mobile data have created strong demand for server memory to store, analyse and process data in data centres.

Since 2002, Samsung Electronics has been the largest supplier of memory chips, called DRAMs and NANDs. Trading volume was moderate at 420 million shares worth 5.3 trillion won (US$4.7 billion), with gainers outpacing losers 430 to 356.

The firm said huge sales of its new Galaxy S8 smartphone and demand for its memory chips were behind the jump in April-June and predicted another blockbuster report for the current quarter to September.

The Galaxy S8 series of smartphones recorded higher sales than their predecessors, helping the company's mobile business to rebound from the fire-prone Galaxy Note crisis that cost almost £4 billion a year ago.

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.

Samsung said its record-high earnings were mainly buoyed by the booming chip market amid rising demand for storage products. 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.

Analysts expect the momentum to continue for the rest of the year, driven by the release of Samsung's next smartphone, the Galaxy Note 8, and sustained demand for memory chips.

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