Samsung Savior

 

Samsung Electronics’ mobile business, the top contributor for the stellar sales growth of the company in the past, is expected to see a dramatic drop in its operating profits stemming from sluggish sales of smartphones. 

In contrast, the semiconductor business will generate profits based on a consistent demand for products. Furthermore, the System LSI division, which has fallen behind Qualcomm and Intel, is exhibiting good performance. As a result, the semiconductor business is once again in the spotlight.

According to industry sources on Sept. 30, Samsung was reportedly asked to manufacture application processors (AP) for the Apple Watch scheduled to be released early next year. Samsung's 28 nm or 20 nm process technology will be used for chipsets. Once the 20-nanometer-class APs are mass produced, supplies are expected to greatly increase. The Korean tech giant is also planning to supply memory semiconductors like DRAM and NAND flash memory chips for Apple's new wearable device. Previously, Samsung’s 10 nm class 3-bit NAND flash are used in the iPhone 6 and the iPhone 6 Plus released on Sept. 19. 

Thanks to the good sales performance of top-ranked memory semiconductors and the improved performance of the System LSI division, the semiconductor business is expected to post quarterly operating profits of more than 2 trillion won in the third quarter.

According to reports recently published by 10 securities companies, Samsung's semiconductor business is projected to record 2.629 trillion won (US$2.471 billion) in operating profits in Q3, similar to the 2.2797 trillion won (US$2.1415 billion) of the IM division. Mirae Asset Securities and Woori Investment & Securities even predicted that the semiconductor business's quarterly operating profits will exceed the figure for the IM division in Q3. If the prediction turns out to be true, it will be the first time for the semiconductor division to achieve higher operating profits than the IM business in 13 quarters, after its previous achievement in Q2 2011. 

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