Sam­sung on a roll as data de­mand for mem­ory chips soars

The Hamilton Spectator - - BUSINESS - YOUKYUNG LEE

SEOUL — Sam­sung Elec­tron­ics is on a roll thanks to boom­ing sales of mem­ory chips re­quired by the in­creas­ingly data-based econ­omy.

The com­pany, the world’s largest sup­plier of mem­ory chips, said Fri­day its op­er­at­ing profit soared 72 per cent in the April-June quar­ter over a year ear­lier to a record high.

Sam­sung has the most ad­vanced mem­ory chip pro­duc­tion tech­nol­ogy.

Ro­bust semi­con­duc­tor sales amid a mas­sive ex­pan­sion of data use off­set slug­gish growth in smart­phone sales in the last quar­ter, the com­pany said. The re­sults beat ex­pec­ta­tions, putting Sam­sung on track for its high­est profit ever in 2017.

The South Korean tech gi­ant put its April-June op­er­at­ing profit at 14 tril­lion won ($12.1 bil­lion US), com­pared with 8.1 tril­lion won a year ear­lier. Sales rose 18 per cent to 60 tril­lion won ($51.9 bil­lion US).

Other mile­stones may be wait­ing. Sam­sung’s quar­terly profit may have sur­passed Ap­ple’s for the first time, and Sam­sung’s semi­con­duc­tor rev­enue, which had been sec­ond to In­tel’s, likely sur­passed the U.S. com­pany’s in the sec­ond quar­ter, an­a­lysts said.

The Su­won, South Korea-head­quar­tered com­pany’s fi­nan­cial per­for­mance has usu­ally mir­rored trends in the global econ­omy or fol­lowed cy­cles in the con­sumer elec­tron­ics in­dus­try, such as how often users up­grade their tele­vi­sions or smart­phones.

That is no longer the case. Now data is driv­ing its growth.

“To process and an­a­lyze big data, data stor­age comes first and this is the driv­ing force be­hind Sam­sung’s record-high profit,” Hwang Min­sung, an an­a­lyst at Sam­sung Securities, said in a re­port.

“Con­sumers’ data us­age ex­ploded and com­pa­nies are not sav­ing their money to in­vest in servers for data stor­age and data anal­y­sis.”

An­a­lysts said smart­phones had a mixed im­pact on Sam­sung’s per­for­mance, with higher costs out­weigh­ing ro­bust sales of Gal­axy S8 smart­phones.

AHN YOUNG-JOON, THE AS­SO­CI­ATED PRESS

Sam­sung said Fri­day that its sec­ond-quar­ter op­er­at­ing profit soared to the high­est in its his­tory.

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