Samsung Electronics announced on Friday that it expects record-high Q2 operating profits, to the tune of USD 12.1 billion. This puts the company on track to achieve the highest profits in its history for the full year, and will allow Samsung Electronics to set itself apart from its main competitors.
This achievement is partially due to Samsung Electronics’ status as the world’s largest supplier of memory chips, which are seeing increased global demand from other tech companies (including giants like Google). Samsung faces no significant competition in this category as no other global manufacturer can match its total output of memory chips. Samsung’s semiconductor division is estimated to have generated nearly USD 7 billion during Q2, accounting for more than half of the quarter’s total profits. This, along with sharp demand for its new Samsung Galaxy S8 smartphone model, has allowed Samsung to continue to generate substantial profits despite somewhat decreased sales of its older smartphones.
Demand is expected to ramp up from global tech giants need to expand their server capacities as data continues to grow. Samsung Electronics also announced earlier last week that it will invest a minimum of USD 18.6 billion in South Korea in order to broaden its leading position in memory chips, as well as next-generation smartphone displays. This investment will create roughly 50,000 jobs. The company also intends to expand its NAND chip plant in Xian, China, in order to meet demand for the chips from manufacturers of high-end storage devices.
If Samsung Electronics’ earnings preview is met, this would reportedly make the company more profitable than Apple, its main rival, in Q2. Incidentally, Samsung Electronics supplies its memory chips for Apple’s iPhone models.
These profits are especially impressive considering the negative press that Samsung Electronics endured last year after exploding batteries in its Galaxy Note 7 smartphones required a mass recall of the product. Many airlines banned the phones from their planes due to the risk posed of a fire during flight resulting from a battery explosion.
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