Samsung sees Q3 income skip as chip surge eases smartphone

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SEOUL: South Korea’s Samsung Electronics Co expects third-quarter profit grew 5.6 per cent, beating estimates, as a surprise in chip surge eases smartphone and display earnings likely counteract the crash of a global smartphone recall that has roiled the tech giant.

The world’s biggest smartphone maker said in a brief filing on Friday its in commission profit for July-September was likely 7.8 trillion won ($7 billion), match up to with the 7.4tr won tipped by a Thomson Reuters StarMine SmartEstimate of analysts’ forecasts. A year earlier operating profit was 7.4tr won.

The compact won’t issue full results until late October and gave no details on the price of recalling about 2.5m Galaxy Note 7 phones after batteries caught fire.

Analysts have said the Note 7 woes ─ rumbling on with Wednesday reports of a smoking battery in a replacement device ─ could have undercut mobile salary by at least 1tr won.

income for the quarter likely fell 5.2pc to 49tr won, the South Korean firm said, less than the Thomson Reuters StarMine SmartEstimate of 51.1tr won.

“clearly the Note 7 recall costs were reflected but (business) segments such as memory and OLED (organic light-emitting diode) displays did well and will almost certainly continue to do so until at least next year,” said IBK Asset organization fund manager Kim Hyun-su.

Samsung’s semiconductor commerce ─ the world’s top memory chip surge eases smartphone maker ─ is thriving as Apple Inc and peers boost the global market, seeking chips for new iPhones and other goods launched ahead of the peak year-end sales term.

Germany’s Dialog Semiconductor Plc, an iPhone chip surge eases smartphone supplier, said on Thursday its revenue beat expectations.

Note 7 chip boost?

paradoxically, the Note 7 problems could also increase Samsung’s chip surge eases smartphone business. business executives say the sudden need for chips in 2.5m replacement phones is exacerbating by now tight memory market setting, which could push prices advanced.

Paul Romano, chief operating officer at US-based electronic constituent distributor Fusion Worldwide, said the firm’s clients, which include Samsung, are currently having a harder time procuring memory chips.

Researcher TrendForce says contract prices for DRAM chips ─ used in provisional data usage ─ will rise by more than 10 percent in October-December.

insist is outpacing supply in the market for NAND chips used for long-term data storage space through the third quarter, the researcher added, tipping prices to carry on rising.

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