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Samsung reports a jump in earnings from a good and solid business | Free Press

Seoul (dpa) – The good chip business and the growing demand for smartphones in its Galaxy series have made the coffers of electronics giant Samsung ring.

Smartphone sales, including its flagship models, increased nearly 50 percent in the third quarter of 2020 compared to the previous three months, the South Korean company announced on Thursday. Cost savings would also have contributed to the good performance of the division.

Things were better for Samsung Electronics, whose president Lee Kun Hee died a few days ago and was buried on Wednesday, also in the consumer electronics business. Samsung is the market leader in memory chips, as well as smartphones and televisions.

According to the information, the surplus increased in the months of July to September by 49 percent year on year to 9.36 trillion won (7 billion euros). Sales were up 8 percent to nearly 67 billion won.

Samsung issued an earnings warning for the fourth quarter, but the outlook for the first half of 2021 was cautiously optimistic overall. Profits are likely to decline in the final quarter of 2020 amid lower demand for memory chips from server customers and tighter competition in cell phones and consumer electronics, it said.

The good result of the IT and mobile communications (smartphones) division in the third quarter of this year was also due to the postponement of the launch of the new Apple iPhone with 5G technology until October. Samsung says it has sold 88 million cell phones and smartphones. The share of computer phones exceeded 90 percent.

Looking ahead to next year, Samsung expects solid growth in “mobile demand,” regardless of geopolitical issues and the possibility of further consequences from the Covid-19 pandemic, which should further fuel the need for chips. The fact that mobile devices in the low and medium price range can also be used on the new 5G mobile network will also help.

“For servers, demand is highly likely to pick up again in the first half (2021) when inventories normalize and customer investments pick up,” said a statement from Samsung. South Koreans this year benefited mainly from increased Internet traffic in the wake of the pandemic. This has driven demand for server and PC memory chips since the beginning of the crisis, as more people work from home.

It is true that prices recently fell again due to oversupply. But rush orders from Chinese telecoms provider Huawei made Samsung grow in the third quarter. In the current trade war between the US and China, Huawei is at the center of a US government lockdown policy.Samsung makes the most money from memory chips.