Samsung chip, telecom profits drop in Q3

Samsung chip, telecom profits drop in Q3

Samsung Electronics saw its operating profit drop in the third quarter of this year, compared to the same period last year.

The world's biggest memory chip maker said revenues rose 5 per cent in the July-September period to 15.2 trillion won ($US16 billion) while operating profit fell 13 per cent to 1.8 trillion won. Overall net profit was 2.2 trillion won, which is up 16 per cent on the same quarter last year.

Operating profit dropped in Samsung's key semiconductor and telecommunications sectors. The only positive movement was seen in the company's digital appliance business, which is one of its smallest business units, where losses narrowed by two-thirds to 10 billion won.

In the semiconductor unit, revenue climbed 7 per cent to 4.9 trillion won while operating profit slid 6 per cent. Demand for dynamic random access memory (DRAM) computer memory chips was strong thanks to an industry-wide shortage, which Samsung said will continue through the fourth quarter.

Demand for flash memory chips, of which Samsung is also a major producer, is also expected to be strong as a result of new media players and mobile phones that carry large memory.

Sales of mobile phones during the quarter hit a record 30.1 million handsets and helped increase mobile phone revenue by 2 per cent. Overall, the telecommunications business saw sales jump 3 per cent to 4.7 trillion won while operating profit fell 5 per cent.

The LCD business recorded a 12 per cent increase in revenue to 3 trillion won but operating profit dropped 46 per cent. Demand for panels for big-screen TVs was strong. More than half of the 3 million TV panels sold by Samsung during the quarter were 40-inches or larger.

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