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Samsung set to post record earnings

by on04 October 2013

Rebound of semiconductor business

Samsung is set to post its second consecutive year of record earnings. The company is seeing a rebound in its semiconductor business which has protected it from a slower smartphone market.

The global chip market has rallied since late 2012 due to a supply shortage and conversion of factory capacity to produce cheaper chips used in smartphones and tablets. A fire in early September at a China plant owned by SK Hynix also helped Samsung’s bottom line.

At the moment there is no serious competitor for Samsung in the memory business and this is going to help the company survive what might have been a dire year. Samsung is estimated to post an operating profit of $35.85 billion this year, up a third from 2012.

Contract DRAM chip prices jumped 9 percent in the second half of September from the first half of that month while spot prices soared 37 percent. UBS estimates supply of DRAM chips by SK Hynix would shrink by 14 percent in the fourth quarter, plunging the overall DRAM market into a supply deficit of some 7 percent.

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