Samsung Electronics logs record high profit on memory chips

By , on October 30, 2017


(Pixabay photo)
The company also announced a monstrous capital investment plan to increase chip production and higher shareholder dividends as the world’s largest chipmaker basks in an unprecedented boom in the memory chip industry that helped it overcome a crisis in its leadership. (Pixabay photo)

SEOUL, Korea, Republic Of — Samsung Electronics Co. reported another record high in quarterly earnings Tuesday as its semiconductor division posted its highest profit ever.

The company also announced a monstrous capital investment plan to increase chip production and higher shareholder dividends as the world’s largest chipmaker basks in an unprecedented boom in the memory chip industry that helped it overcome a crisis in its leadership.

The South Korean company’s July-September net income surged 150 per cent to 11 trillion won ($9.8 billion), compared with 4.4 trillion won a year earlier.

The result beats analysts’ consensus of 10.9 trillion won, according to financial data provider FactSet.

Sales rose 30 per cent to 62 trillion won ($55.1 billion) while operating profit nearly tripled from the previous year to 14.5 trillion won ($12.9 billion), in line with its preview.

Samsung, the world’s largest maker of smartphones, has continued its record-breaking earnings streak thanks to a global boom in memory chips, even as its de facto chief was sentenced to five years in prison on a conviction for bribery.

To respond to a surge in demand for memory chips that power data centres and mobile devices, Samsung is spending 46.2 trillion won ($41.1 billion) in capital expenditure this year, including 29.5 trillion won to increase output of chips. That is nearly twice as large as Samsung’s last year’s capital spending of 25.5 trillion won.

Samsung is also earmarking 9.6 trillion won ($8.6 billion) each year from 2018 to 2020 for shareholder returns, nearly double its dividends in 2017.