Samsung posted its latest financial earnings last night and the company has not only had a phenomenal overall quarter, beating even its own expectations, but has also seemingly done the impossible: overthrown Intel as the leader of the chip market. However, there’s more to the story than processor sales.
The South-Korean company posted 61 trillion won ($54.7 billion) in revenue for the quarter ending on June 30th, 2017, up 19.2% year over year. More impressive is the operating profit which surged 72.7% YoY, reaching 14.7 trillion won ($12.67 billion). This essentially makes Samsung the most profitable tech company in the world for the quarter, with Apple expecting to post a profit of around $10.55 billion, according to market analysts.
The overall strong performance was mainly facilitated by very strong showings in the semiconductor, chip, and display divisions, as well as a robust performance by the mobile division inside of the company. In terms of semiconductors, Samsung pulled out all the stops and managed to dethrone Intel for Q2 in terms of revenue and profit.
This impressive feat came as Samsung’s semiconductor business posted profit of 8.03 trillion won ($7.1 billion) up from 2.64 trillion won posted a year earlier. The increase was fueled by rapidly rising demand for server DRAM and SSD memory as well as more affordable 10nm and 14nm mobile chips. Intel only posted a profit of $3.8 billion for the same quarter.
Samsung’s continued investment in these fields, as well as development of V-NAND memory, which is currently ramping up production, have ensured that the company remains the leader in this field. Weak market competition with increasing server demand are keeping asking prices high, which Samsung has been able to capitalize on.
Samsung’s diversified portfolio in this field and continued investment in high-performance high-storage server memory and 10nm range processors likely mean the company will be a strong competitor for Intel going forward. Intel, on the other hand has continued to struggle, by missing out on the mobile market, having no clear strategy for the future, and delaying its desktop 10nm processors.
Going forward, Samsung expects to post a similarly strong result next quarter, though overall profitability may be down due to increasing market competition and costly investment in sub-10nm foundry technology.
Source: Samsung
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