Samsung posts record quarterly revenue on strong chip demand

The company benefits from strong demand for memory chips and panel displays in the third quarter.

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Samsung said its mobile division got a boost from sales of its new Z Flip 3 and Z Fold 3.

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Samsung on Wednesday reported its highest-ever quarterly revenue, thanks largely to continued strong demand and increasing prices for memory chips, as well as sales of panel displays for smartphones.

The Korean electronics giant said its revenue for the three-month period ended Sept. 30 came in at 73.9 trillion won ($63 billion), a 10% increase over the year-ago period, which was the previous record-setter for revenue. Samsung also reported that its operating profit soared 26% to 15.8 trillion won ($13.4 billion), the second highest in the company's history.

Samsung may be known as a giant in phones and TVs, but it also has huge businesses making components like memory chips. The company has counted on its components business to buoy its revenue, while its other electronics have struggled. Since the coronavirus pandemic began, Samsung's chip business has gotten a boost from data centers that rely on the technology to store everything we're doing online.

The company's semiconductor business reported sales of 26.4 trillion won in the third quarter, a 16% increase year-over-year, on continued strong demand for servers and PCs as companies opt for hybrid work arrangements.

Revenue in Samsung's mobile panel business rose 21% to 8.86 trillion won on strong sales of small to midsize OLED panels as major smartphone customers launched new products. However, the company's large-display business continued to suffer from price declines in LCD panels.

Despite strong demand for new foldable phone models such as the Galaxy Z Fold 3, which was introduced in August, revenue in the company's mobile division declined 8% to 27.34 trillion won. Samsung said earlier this month that the new Z Flip 3 and Z Fold 3 are more popular than their predecessors but didn't offer specific sales data.

The company said it expects demand for its smartphones to increase in the fourth quarter due to strong holiday shopping, but it also warned that concerns over component supplies are likely to continue.

"The Mobile Communications Business expects to post robust profitability by expanding sales of premium products such as foldable phones, meeting replacement demand with low- to mid-range 5G smartphones and increasing sales of tablets and wearables," Samsung said in a statement.