Report: Samsung's Chip Business To See Record 2017 Profits

Samsung Logo 2016 AH 8

Samsung and SK Hynix are poised to hit new records in terms of quarterly profits, some industry watchers predict. According to a new report from their home country of South Korea, recent trends could see both technology giants surpass 10 percent of the country’s yearly budget which currently sits at around $354.08 billion. The gains are largely attributable to profits brought in by each organization’s semiconductor operations, and the combined profits of both SK Hynix and Samsung are currently predicted to be between $41.5 billion and $42.38 billion for the year. That’s not altogether surprising since the firms reportedly hold just short of 70 percent of the global semiconductor market.

For Samsung’s part, the tech giant is now expected to bring in around $13.16 billion in the third quarter alone. That estimate is up from previous predictions, which saw the company bringing in closer to $12.36 billion, and operating profits from its semiconductor business are expected to be around $8.83 billion. Meanwhile, market watchers expect SK Hynix to post operating profits of around $3.53 billion for the current quarter. The numbers expected from both companies have fluctuated over the past several months due to the competition in the semiconductor market space and increases in the demand for mobile DRAM chips, despite predictions that the component demand is set to drop. Those increases have also led to rising prices for both DRAM and NAND memory from $1.50 to $3.25 per chip as of last month and from $3.00 to $5.78 per unit from last year, respectively. That has, in turn, led to a higher-than-expected return on investment for the companies and consequently upped their expected profit margins.

Strong sales in the semiconductor portion of the technology market have also been attributed to Samsung’s rapid advance to become the most profitable company in the world as of Q2 2017. The demand for those components doesn’t currently show any signs of slowing, either, as more IT firms push to meet the demands of both enterprise customers and consumers. Beyond that, the Seoul-based firm also recently unveiled and began selling a brand new addition to its extremely popular Galaxy Note family of devices in the form of the Galaxy Note 8. That should only serve to bolster its position in the global market in general, alongside its strong holdings in key countries such as India, China, and the U.S. Samsung is expected to officially report its Q3 2017 earnings in late October.