Samsung has record quarter on increased profits in memory market
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.