US analysts are predicting a 700% increase in first-half net profit for Samsung Electronics Co from 150bn won ($130m) last year to 1.2 trillion won ($1.04bn) this year according to a report in the Wall Street Journal.
Samsung Electronics is the world’s top DRAM maker and the bulk of its sales, or some $6.7bn last year, comes from semiconductors. Despite two poor years for international chip makers in 1997 and 1998, when most of its Japanese and Korean rivals were turning in substantial losses, Samsung Electronics managed to record a small but significantly reduced profit.
However an upturn in the market in the first part of this year saw demand and prices surge. Samsung Electronics’ wafer fabrication facilities have been running at full capacity for most of the year, up from around 50% capacity when demand was at its lowest, and a large boost to the bottom line is inevitable.
Also helping to boost profits is the relatively new but very rapidly growing TFT-LCD panel business, with most of the output going to notebook PC makers. Samsung Electronics was the world’s top TFT-LCD manufacturer in the first half of this year churning out 1.84 million panels for a 19% market share. Demand is still outpacing supply and the margins are high.
Samsung is also a major cellphone maker and has been performing well both domestically and on export markets. In Korea it had a 52% market share in the first six months of this year selling 3.45 million handsets. Other new lines such as internet devices like Web Screen Phones are also starting to impact significantly on sales figures for the first time this year.
