Samsung hits record quarterly profit on back of semiconductor business

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Samsung Electronics, the world's biggest maker of memory chips, display panels and TVs, posted a double-digit increase in its second-quarter profit thanks to brisk sales of semiconductors.

The Journal also said the record-breaking results also position Samsung to top Apple in quarterly profits for the first time.

Samsung said that despite the strong sales performance of premium smartphones, its total smartphone shipments remained at a similar level quarter on quarter, due to decreased sales of mid- to low-end products.

Apple, set to launch its 10th-anniversary iPhone this year, is still projected to notch up larger full-year profits than Samsung.

The company revealed an operating profit of 14.1 trillion South Korean won ($12.67 billion).

Several currency traders in Seoul said they suspected that foreign exchange authorities purchased dollars to temper the won's gains ahead of the closing bell.

In May, Samsung said it had sold over 5 million Galaxy S8 and S8 Plus units.

It has also been buffeted by a scandal that has seen vice-chairman and heir Lee Jae-Yong charged in connection with the sprawling corruption scandal that brought down South Korean president Park Geun-Hye.

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Indeed, nearly 60 percent of the company's quarterly income came from its semiconductor business, which recorded 8 trillion won in operating income from sales of 17.6 trillion won. Samsung provides its chips to other companies including Apple.

"The dovish statement from the Federal Open Market Committee (FOMC) contributed to a rise of USA shares overnight, which also had a positive impact on the Korean main bourse", said Seo Sang-young, an analyst at Kiwoom Securities.

Earlier this month, Samsung announced plans to invest $18 billion to expand and upgrade its chip plants in Korea, with the aim of extending its lead in the market.

The factory in Pyeongtaek, 70 kilometres (44 miles) south of Seoul, is the world's biggest and has recently started production after the firm spent 15.6 trillion won in two years to build it.

"Greater use of smartphones and tablet PCs instead of computers is driving the rise of companies like Samsung", Chung said.

Samsung is also upbeat about its business in the second half of the year. He added that the S8's success puts the problem of the exploding Note 7 to bed.

The indictment in February sent shockwaves through the firm and triggered the announcement of a major reform of its top-down management style.

He has effectively been at the helm of the group since his father suffered a heart attack in 2014.