Samsung Electronics posts double-digit growth in Q3 profit

Samsung Electronics Co. reported its first earnings gain in more than a year on Thursday as a record profit from computer chips masked a decline in its smartphone business.

‘The memory market saw an increase in demand… driven by an overall increase in capacity in chips and the launch of flagship smartphones and increased demand by data centres, ‘ the company said in an earnings statement.

Operating profit in the semiconductor business surged to a quarterly record of 3.6 trillion won, up 60 per cent from a year ago. Liabilities also increased, however, from 231.7 trillion won to 246.6 trillion won.

Another report also suggested that the South Korean tech giant might use both Exynos 8890 and Qualcomm Snapdragon 820 chipsets on the Samsung Galaxy S7 and Galaxy S7 Edge.

It was up 7.18 percent from the previous three-month period. South Korean website Business Korea has reported that Samsung will begin mass production of the Exynos 8890 processor in December and the successor to the Galaxy S6 will be powered by the new chipset.

The mobile unit will focus on maintaining a profit level similar to the previous quarter by expanding sales for each price segment that were introduced in the third quarter, and by continuously improving cost efficiency, the company said.

Net income advanced 29.28 percent from a year earlier to 5.46 trillion won in the third quarter.

A lot of these profits come from Samsung’s strong grip on the chip market, where the company raked in 3.66 trillion won.

The decision to increase shareholder returns suggests that Samsung is getting serious about supporting its share price, which fell to a three-year low just weeks earlier.

Lotte Chemical said it will also buy a 465 billion won stake in Samsung Fine Chemicals from various Samsung Group arms, including Samsung Electronics Co Ltd.

Despite a major overhaul of its product lineup, researcher TrendForce says Samsung’s smartphone shipments will shrink for the first time in 2015 due to competition from Apple Inc in the high-end market and Chinese rivals in the low end.

“Samsung’s plans proved attractive to investors at a time when recent profits by the company were weaker than expected and there were doubts over their handset supply capabilities”, said Kim Hyung Ryeol, a stock analyst at Kyobo Securities.