Samsung Electronics to post record Q3 profit

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Samsung Electronics to post record Q3 profit

Samsung Electronics is set to post a hefty jump in third-quarter profit to record levels after its chip unit put in a sterling performance on demand from data centers and improved production yields.

The July-September quarter is, however, expected to mark a peak in earnings as a two-year super cycle of tight supply and soaring demand comes to an end, with prices of some types of chips already sliding sharply.

The world’s top memory chipmaker, due to report preliminary results on Oct. 5, is forecast to book an 18 percent surge in operating profit to 17.2 trillion won ($15.5 billion), showed a poll from Refinitiv, a financial markets data provider. Revenue is seen climbing 3.7 percent.

That beats operating profit growth of 6 percent in the previous quarter when its Galaxy S9 device missed sales targets and competition from cheaper Chinese-made phones ate into margins for its mobile business.

The big boon for Samsung has been a spike in prices for DRAM memory chips, which are its main memory product. DRAMeXchange, a market intelligence provider on DRAM and NAND flash chips, estimates the average price of server DRAM rose 14 percent in the third quarter from a year earlier as companies build data centers for cloud computing.

But prices for NAND chips, used for longer-term data storage, more than halved in the same period as supply swamped demand. Those drops are expected to accelerate, while most analysts also predict DRAM prices will begin to decline.

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