Samsung on a roll as data demand for memory chips soars
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.
Samsung said Friday that its second-quarter operating profit soared to the highest in its history.