However, price pressure in the computer memory business, which accounts for the bulk of its sales, has squeezed margins and the Seoul, South Korea company is struggling to increase profits.
In the third quarter to September 30, net income rose 0.9% to KRW 2.19 trillon ($2.39bn) on revenue up 9.6% at KRW 16.68 trillion ($18.2bn). Mobile handsets were the star performer with operating profit of the telecom division up 13% to KRW 50bn ($644.5m) and handset revenue 8% higher at KRW 4.8 trillion ($5.2bn).
There was a sequential increase in its average selling price from $148 to $151, and it has performed well in western markets for 3G phones. It forecast that annual sales will 157 million units, which it will solidify it as the world’s second-largest mobile phone provider.
However, Samsung is dependent on the memory market where prices are falling and supply frequently exceeds demand. It recorded a 28% fall in operating profit of its semiconductor business to KRW 920bn ($1bn) on sales up only 2% at KRW 5.01 trillion ($5.5bn).
The company said that in the DRAM business, product differentiation and cost competitiveness were the main drivers of its solid performance in the midst of unfavorable conditions. It said prices of NAND flash continued to be strong following the introduction of new products that require larger memory, such as mobile phones targeting music fans and personal multimedia players.
Samsung said it expects both the DRAM and NAND flash business to grow in the high-demand season that begins in the fourth quarter.
