Samsung predicts record profits for third quarter as memory business booms

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Samsung Electronics Co. said Friday its third-quarter profit likely surged almost three-fold over a year earlier to a new record, putting it on track to report its best annual results at a time when its leader and former executives are fighting corruption convictions.

Samsung raked in 8.03 trillion won from the chip business in the April-June period in operating profit, along with 4.06 trillion won from the mobile arm.

The South Korean tech giant's new record is a rise of 178.85 percent from last year, when profits were at a three year low of 5.2 trillion won due to the Galaxy Note 7 debacle.

Strong global demand for DRAM chips will continue to outpace supply in 2018 as new plants from Samsung and No. 2 memory chip maker SK Hynix are not expected to operate until 2019, while demand for NAND flash chips exceeded supply for six straight quarters as of last month, DRAMeXchange, a division of data provider TrendForce, said.

Analysts said Samsung's chip business may have posted an operating profit of 10 trillion won in the third quarter, along with sales of 20 trillion won, putting the operating margin at above 50 percent.

The results don't include net income or break out divisional performance. Samsung's shares fell less than 1 percent in Seoul on Friday after the results were released.

Sales of its display business, mostly from its high-end, small-sized flexible OLED screens, which it sells to rival Apple, are also a likely contributor. Analysts said Samsung's strong earnings are attributable to increased shipments of chips.

Samsung is also struggling to stem a further setback of its reputation from the August conviction of de-facto chief Jay Y. Lee, on charges he bribed a presidential confidante to secure support for a 2015 merger that cemented his control.

His ailing father Lee Kun-hee has been hospitalized since 2014, and is now unable to participate in the company's management.

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