Samsung Electronics on Thursday reported an 88.9 percent jump in its second quarter net profit, boosted by demand for its memory chips and a rise in smartphone sales as the firm seeks to move on from last year's recall debacle.
The clear standout business segment for Samsung was its semiconductor business, which increased its operating profit to 8 trillion won from 2.6 trillion won a year ago.
Operating profit was up 72.9 percent from the previous year to 14.07 trillion won, while the firm's overall sales increased 19.7 percent to 61 trillion won.More news: Six Congress MPs Suspended by Lok Sabha Speaker for 'Creating Ruckus'
Buoyed by voracious requests for DRAM and NAND memory chips for everything - from servers to IoT connected devices - Samsung's semiconductor division alone was responsible for the whopping $7.2 billion in operating income on sales of $15.8 billion.
Coupled with tight supply conditions, the surge in demand drove up the prices of memory chips over the past year, allowing the world's two largest memory chip makers, Samsung and SK Hynix, to enjoy an unprecedented level of profitability.
Samsung said it has 54 trillion won in net cash, an 11 trillion won decrease from the same time past year.More news: Aaron Judge Hit A Ball So Far That Statcast Couldn't Track It
The company has also seen lower sales of its mid-range phones but a refresh of its Galaxy J series should be able to renew demand in the sector.
However, Samsung said the outlook for its semiconductor business still looks rosy, as it expects companies to continue adding to their server memory capacity. Analysts expect the iPhone maker to report revenue of $44.9 billion and an operating profit of $10.5 billion, according to Reuters and Bloomberg data.
Apple, which is due to report its financial results on Tuesday, is forecast to have booked 8.2 billion dollars in net profit during the three-month period, according to FactSet, during a typically slow season for the company.More news: Taliban makes further gains in Afghanistan, capture two districts in Ghor, Faryab
For the mobile business, revenue increased 11 percent to 29 trillion won but profit fell by 3 billion won to 4 trillion won. "As these [cloud infrastructure] players grow, they will only need more chips and that helps Samsung".