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Samsung profit tops estimates bolstered by memory-chip demand

Samsung profit tops estimates bolstered by memory-chip demand

Analysts are expecting similar or lower profits in the second quarter, a result of slower growth in DRAM chip prices and increased marketing costs for the Galaxy S9 handsets. The firm expects operating profits of 15.6 trillion won (around $14.6 billion), marking a 57.6 percent increase from the same period a year ago.

Revenue for the quarter was tipped to rise 18.7 percent, Samsung said in a regulatory filing.

Korea exported more than $10 billion in semiconductors this March in its highest-ever monthly sales, thanks to steady global demand for computer chips as technologies such as artificial intelligence, big data and cloud storage advance.

Samsung's guidance report did not give specific details about the performance of the four divisions of the company - semiconductors, display, consumer electronics and IT and mobile communications.

Analysts said memory chips were still the main driver of Samsung's profits, making up about 75 percent of its operating income, despite fears over the possibility that the industry cycle may have peaked.

The prices of NAND chips commonly used in mobile devices began falling late previous year and analysts have been closely watching for signs of the peak in the DRAM price boom as well.

This is expected to slow in coming quarters though, as analysts expect the chip boom to wind down.

Rumours are now circulating that Samsung is already working on its next Galaxy S9 model, following a new benchmark result shared on the website Geekbench.

That was largely due to the company's new Galaxy S9 and S9+ smartphones, which has received positive market response after its release in late February.

"I think the administration is trying to put a brake on Samsung's no-union policy, which labor has long criticized", said Kim Tai-gi, an economics professor at Dankook University, referring to the labour-friendly government of President Moon Jae-in. She declined to comment further on the probe and had no immediate comment on whether a raid had taken place at the unit which carries out repairs for Samsung Electronics products.



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