Samsung forecasts record profit thanks to strong chip demand
Samsung Electronics is set to defy concerns over the growth of the global semiconductor market with record third quarter earnings pushing sales up to an estimated 65tn won (£44bn), the South Korean company said.
The smartphone and semiconductor giant reported a 20pc surge in profits for the three months ending in September to 17.5tn won and a 4.8pc increase in revenues. The results continue a strong run of form even as analysts cast gloom over the future market growth.
Analysts have predicted a slowdown in demand for chips, with Morgan Stanley cuttings its outlook for the sector. Samsung's shares have fallen more than 12pc since the start of the year.
Samsung, known for its smartphones and consumer electronics, makes most of its profits from memory components that feature in billions of devices.
But its growth has been overshadowed by corporate scandal at the South Korean behemoth. Jay Y Lee, heir to the Samsung empire, spent almost a year in prison for bribery and embezzlement.
The company's chief executive, Lee Sang-hoon, was indicted by South Korean prosecutors last month for trying to sabotage workers' unions.
Samsung will reveal its full earnings in late October.
While microchips have continued to boost earnings, the company's smartphone division has failed to keep up its performance in recent months. In July, Samsung reported poor demand for its new Samsung Galaxy S9 and S9+ smartphones.
Samsung released its new premium smartphone, the Samsung Galaxy Note 9, early this summer shortly before the release of Apple's iPhone XS. But cheaper Chinese rivals and cooling global demand for smartphones have hit the business.
Samsung is set to add to its high-end portfolio with the launch of new 8K televisions later this month. These premium displays have four times the number of pixels as current 4K televisions.
