The world's biggest memory chipmaker is likely to see its semiconductor earnings charge to a three-year high - a much-needed shot in the arm - just as sales of its flagship Galaxy S4 smartphone begin to flag, analysts say.
The global chip market has rallied since late 2012 due to a supply crunch caused by years of cautious investment to support prices, and conversion of factory capacity to produce more profitable chips used in smartphones and tablets.
The market further tightened following a fire in early September at a
"As of now, there is no real competitor for Samsung in the (memory) chip business," said
Contract dynamic random access memory (DRAM) chip prices jumped 9 percent in the second half of September from the first half of that month while spot prices soared 37 percent.
UBS estimates supply of DRAM chips by
Shares in Samsung ended Friday unchanged, after advancing as much as 3.1 percent on Wednesday prior to the earnings guidance announcement. Financial markets in
SLOWING GROWTH Samsung estimated third-quarter operating profit rose 25 percent from a year earlier, the slowest since the third quarter of 2011 when profit shrank 11 percent.
Samsung's mobile devices business has helped the company report a record profit every quarter since last year, except the first three months of 2013.
The division, which generates two-thirds of the company's total earnings, is stalling as sales of the Galaxy S4 slow and the high-end market rapidly saturates, analysts say.
"The concern that high-end smartphones could see slower growth is a valid one. But Samsung has both the speed and fast-follower tendencies of Zara and a portfolio spanning high- and low-end products as well as components such as a brand like Swatch," Lee at IBK said.
Samsung is widely expected to have sold 86-88 million smartphones in the third quarter, up from 76 million in the second quarter, as the company increased shipments of cheaper models to emerging markets.
Profits at its mobile division are seen at
Underscoring the slowing pace of growth in the industry,
Samsung is now hoping new products such as the Galaxy Gear smartwatch and a curved smartphone, which it plans to introduce this month, to help sustain growth momentum.
Hot on the heels of Samsung,
As Samsung battles slowing growth at the top end of the market,
Samsung said on Thursday that Packingham left the company for personal reasons. The departure followed the appointment of Gregory Lee, a former head of Samsung's
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