While smartphone are projected to remain stagnant, operating profit margin in the chips division increased by nearly 10 percent on fears of a supply shortage.
Though Samsung may be struggling with a saturated smartphone market and weak launches the company managed to post an impressive quarterly profit Friday, up 26 percent from the same quarter last year to $9.6 billion.
Samsung’s growth in profit this quarter has largely been because of its memory business. While Samsung projects single digit growth in its smartphone business, from 1 to 5 percent, its memory business posted a profit of $1.8 billion and saw its margin grow to 21.1 percent from 11.7 percent a year earlier due to supply shortage from a fire at SK Hynix’s memory manufacturing plant in Wuxi, China.
Its mobile division posted profits of $9.57 billion, making it the most profitable division of the company, but some analysts have concerns that Samsung has hit a ceiling in growth. While its low-end Galaxy smartphones have had success in emerging markets, it’s up against increasing competition in the low-end space from Apple and Chinese startups such as Xiaomi and growing Indian manufacturers like Micromax.
Samsung’s shares are currently unchanged on the Korean stock market.