Thanks for the Memory! Samsung Profits Still Driven by Chips

Samsung's blockbuster fourth-quarter earnings were once again driven by the strength of its semiconductor business -- particularly the memory sector -- but the company is expecting its mobile device division to improve with the launch of its forthcoming Galaxy S9 smartphone.

For the fourth quarter, Samsung Electronics Co. Ltd. (Korea: SEC) reported an operating profit of 15.15 trillion won ($14 billion) for the winter quarter, up from the 9.22 trillion won ($8.6 billion) profit in the same period last year. For the full year, Samsung posted an operating profit of 53.65 trillion won ($50 billion).

"Fourth quarter earnings were driven by the components business, with the largest contribution coming from the Memory business that manufactures DRAM and NAND, as orders for high-performance memory products for servers and mobile storage were strong," Samsung said in a statement.

The South Korean conglomerate says that it is expecting "strong demand for memory products used in datacenters" in the first quarter.

Samsung said that total smartphone shipments declined for the quarter, due to "lineup optimization of low-end models." The company is expecting its newest flagship device to bolster sales in the coming quarter.

"In the first quarter, the company expects the mobile business to improve its earnings, led by an increase in sales of flagship products with the launch of Galaxy S9," Samsung said.

The results show a company that has confidently shook off the exploding Note 7 debacle in 2016, and the vice chairman of Samsung getting five years' jail time in August 2017. (See Samsung's NoteGate: Winners & Losers and Samsung Boss Gets 5 Years in Scandal Trial .)

— Dan Jones, Mobile Editor, Light Reading

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