Samsung announces £9.3 billion quarterly profits as it eyes up Intel’s chip crown

Samsung’s charge for Intel’s memory chip crown goes marching on. Earlier this week, many industry analysts predicted that Samsung would dethrown Intel as the number one chip manufacturer in the world. And now the South Korean tech giant has reported record quarterly profits, thanks largely to a boom in demand for its memory chips.

Reporting an operating profit of 14 trillion won (£9.3 billion) in the three months up to June, Samsung has increased profit by 72 per cent year-on-year. Sales climbed 18 per cent to 60 trillion won, buoyed by strong sales of smartphones including the new flagship Galaxy S8.

The numbers prove that Samsung has overcome the disastrous embarrassment caused by the Galaxy Note 7 recall, after users complained of the device ‘exploding’ or catching on fire due to a battery fault. The company suffered a further PR nightmare when its chief Jay Y Lee was arrested over an ongoing political bribery scandal. However neither the Note 7, nor Lee’s upcoming trial appears to have affected the running of the company.

Benefitting from both a rise in demand and price for semiconductors and smartphone memory chips, many industry analysts now believe Samsung could outdo Intel in terms of sales in 2017. It would be the first time Intel was knocked off the top of the global semiconductor market-share rankings for the first time since 1991.

"From the second quarter, Samsung will become No. 1 in market share due to the recent increase in data centers and demand for solid-state drives," NH Investment & Securities analyst Peter Lee wrote in a note to clients.

Underscoring its dominant position, Samsung said on Tuesday it plans to invest some $18.6 billion in South Korea as it seeks to extend its lead in memory chips and next-generation displays for smartphones.

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