Chip firm has record quarter

Samsung Electronics Co. announced yesterday record quarterly sales of 11.3 trillion won ($9.6 billion), operating income of 2.1 trillion won and net income of 1.8 trillion won for the third quarter. It attributed the sales increase, in part, to explosive growth in sales of flash memory chips and cell phone handsets. Sales rose 14.5 percent, operating income increased 77 percent and net income jumped 63 percent over that of the second quarter. Compared with the third quarter of last year, sales rose 13.5 percent, operating income was up nearly 16 percent and net income rose 6.6 percent. This is the first quarter in which Samsung has recorded 11 trillion won in sales. Sales of semiconductor memory chips reached 2.6 trillion won and flash memory chips accounted for a third of those sales. In the period from April through June, flash memory was only a quarter of the firm’s sales. Buoyed by healthy sales of high-end cell-phone models, Samsung delivered a record 15 million units in the quarter, up 25 percent from the previous quarter. Those mobile handsets accounted for 3.4 trillion won of Samsung’s revenue. Liquid crystal display panel sales grew 26 percent to 1.4 trillion won. The only news that was less than sterling was a 21-percent drop in home appliance sales; they dropped to 770 billion won. “The figures are better than expected. The won strengthened against the dollar, oil prices were rising and the domestic economy was stagnant,” said Chu Woo-sik, a senior executive at Samsung. To keep up with rising sales of memory chips and flat-panel displays, Samsung Electronics said it would invest an additional 500 billion won to boost production. Samsung’s board voted yesterday to buy back and retire 1 trillion won worth of its outstanding stock, including 2.15 million common shares and 330,000 preferred shares. The transaction is to be completed by Jan. 20, 2004. Despite good results, Samsung’s share price fell 1.6 percent on the stock market yesterday. Samsung said ground will be broken for a liquid crystal display factory on Oct. 30 in Cheonan. The plant will be a joint venture with Japan’s Sony. According to Japan’s Nihon Keizai newspaper, Samsung and Sony will sign a deal next week. The joint venture is expected to produce 100,000 substrates per month from which liquid crystal displays will be cut. by Limb Jae-un