Rising chip prices boost Samsung profits

Samsung Electronics Co. Ltd. noted a 28% gain in its third-quarter operating profit, its highest in three years, thanks to increasing memory chip prices and display sales for new flagship smartphone launches.

The initial result was 26% higher than the second quarter but was still lower than forecasted, while the market reaction dampened as analysts predicted a flat or slightly lower result this quarter on an expected drop in the prices of memory chips.

The world’s leading memory chip and smartphone producer estimated its July-September profit at 15.8 trillion won ($13.3 billion), the highest quarterly profits since 2018’s third quarter.

The chip division rose 79% from a year earlier, a rise that analysts attributed to an increase in memory chip prices and shipments combined with a jump in profitability at Samsung’s chip contract manufacturing business.

Semiconductors accounted for half of the company’s operating profit in the first half of 2021.

Samsung’s stock has dropped about 12% so far this year vs. a 3% gain in the wider market, incurring losses in September when U.S. peer Micron Technology Inc. stated its memory chip would decline in the near term.