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Samsung reports highest profit in two years on chips, LCDs

Samsung Electronics reported its highest quarterly net profit in over two years on Friday as its semiconductor and LCD businesses returned to profitability.

The company’s second quarter was also helped by stronger sales of LCD TVs and mobile phones, and the company noted increasing sales of Mobile WiMax network equipment.

The world’s largest memory chip and LCD panel maker said its net profit rose 5 percent year-on-year to 2.25 trillion Korean won (US$1.80 billion) in the second quarter, it’s best showing since the fourth quarter of 2006, when its net profit was 2.37 billion won. Samsung’s revenue rose 16 percent to 21.0 trillion won.

Samsung is considered a bellwether for the global technology industry due to its size and market share in important businesses, from memory chips and LCD panels to mobile phones. The strong results show demand for technology products remains resilient in the face of the global recession.

Two of Samsung’s biggest businesses, semiconductors and LCD panels, both returned to profitability in the second quarter after two straight quarters of losses.

Rising DRAM prices helped Samsung return to profitability in its semiconductor division. The company noted stronger PC sales during the second quarter and said limited DRAM supply growth helped push up prices. PC shipments could rise 10 percent quarter-on-quarter in the third quarter, Samsung noted in its presentation materials.

Demand for higher end DDR3 (double data rate, third generation) DRAM chips increased for notebook PCs and servers, Samsung said. The chips offer far higher bandwidth than their predecessor, DDR2, and greater power efficiency.

NAND flash memory prices also increased as more of the chips were used in smartphones, Samsung said.

Mobile phone shipments rose 14 percent year-on-year for Samsung to 52.3 million units. Sales increased in developed and emerging markets, the company noted, saying sales of touchscreen and messaging phones remained robust in the U.S. and Europe.

The company forecast it will ship 200 million handsets this year.

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