Samsung may have hit record Q3 profit, but memory chip price drop a concern

Samsung Electronics Co Ltd said quarterly operating profit likely surged by a fifth to a record high, with its chip unit bolstered by robust demand from data centres and gains in production yields.

But sharp price slides for some types of semiconductors have brought an end to a two-year super cycle of tight supply and soaring demand, and analysts expect the July-September quarter will mark a peak in earnings for the South Korean tech giant.

The world's top maker of memory chips and smartphones said a preliminary estimate showed third-quarter profit jumped 20.4 per cent to 17.5 trillion won ($15.5 billion) on a 4.8 per cent gain in revenue, in line with market expectations.

That would beat operating profit growth of 6 per cent in the previous quarter when its Galaxy S9 device missed sales targets and competition from cheaper Chinese-made phones ate into margins for its mobile business.