Samsung reports best quarter ever but warns of chip slowdown

BOOMING demand for Samsung’s memory chips and the success of its latest smartphone have led the Korean electronics giant to forecast record quarterly profits.

However, the company’s buoyant financials were cancelled out by warnings that the chip boom of the past 18 months is peaking, leading the company’s shares to fall slightly.

Samsung Electronics, the biggest and best known part of the Samsung corporate empire, predicted that operating profits had reached 15.6 trillion won (£10.4bn) in the first three months of 2017, up 58pc year on year.

It said revenues had climbed to 60trillion won, up 19pc. If the figures are confirmed when Samsung reports full results later this month, it will be the company’s most profitable quarter ever and one of the biggest quarterly corporate profits of any company ever, bettered only by its main rival Apple and the oil giants Shell, Gazprom and Exxonmobil.

While Samsung is best known for its smartphones, televisions and household appliances, the firm makes the majority of its profits from the memory components that feature in billions of gadgets and computer servers.

Analysts have this week highlighted rising competition among memory chip makers, which is likely to lead to lower prices and means Samsung may struggle to maintain the string of record profits it has recorded in the past year. Shares fell by 0.7pc despite profits beating expectations.

Its stellar performance has come amid corporate turmoil. Jay Y Lee, the heir to the Samsung empire, spent just under a year in prison for bribery and embezzlement. He was released this year when a court reduced his sentence, and said he will appeal again to clear his name.

Samsung released its iphone challenger, the Galaxy S9, last month. Early forecasts suggest strong sales.