Return to strength for Samsung as demand for memory chips helps drive profits at electronics giant
Samsung Electronics continues to enjoy very healthy profit increases after the firm predicted record second quarter earnings when the official figures are released later this month.
It forecasts a 72 percent increase in operating profits and an 18 percent sales rise. This comes despite pressure on the firm from activist investors and the political woes of its vice chairman and heir apparent Jay Y. Lee, currently embroiled in a bribery trial over an influence-peddling scandal.
The Korean giant said that operating profit was likely 14 trillion won ($12.11bn or £9.4bn), compared with the 13.1 trillion won (£8.8bn) average expected by analysts.
Revenue also was predicted to rise 18 percent from a year earlier to 60 trillion won (£40.2bn), versus analysts’ forecast of 59 trillion won (£39.5bn).
Samsung was apparently able to beat these analyst expectations thanks to strong memory chip prices, which helped drive profits.
These memory chips are used in devices such as PCs and servers, as well as smartphones, but the demand for cloud computing services and artificial intelligence are thought to be the principle drivers for the memory chip demand.
But Samsung has also being helped by its performance with next-generation displays, according to Reuters.
It cited organic light-emitting diode (OLED) displays as another strong profit driver for the firm.
Samsung did not provide any indicators as to the performance of its recent flagship mobile device, the Galaxy S8.
Analysts will no doubt be closely watching the sales performance of the 5.8 inch Galaxy S8 and 6.2 inch Galaxy S8+.
Another device that will be closely watched will be the new Galaxy Note 8 expected in August this year.
Last year it its predecessor was pulled from the market last year due to fire-prone batteries.