Samsung Overtaking Intel in Chip Race

Samsung Electronics should post its best ever profit for a quarter with soaring sales in memory chips driving it past Intel Corp as the largest maker of semiconductor chips through revenue for just the first time.

The soaring demand in processing firepower for servers and smartphones has made Samsung one of the biggest beneficiaries for chipmakers along with other members of the industry.

Underscoring its position of dominance, Samsung announced Tuesday it was planning to invest over $18.6 billion in South Korea seeking to extend the lead it has in memory chips and its next generation displays used in smartphones.

The tech giant based in South Korea is the third largest company in Asia by market capitalization and is now ready to knock Intel from the top of the global semiconductor rankings for market share for just the first time in 26 years.

Beginning this quarter, Samsung will be No. 1 in overall market share because of an increase in data centers and the demand for new solid-state drives, said a market analyst in Hong Kong.

Operating profit for Samsung from April through the end of June is expected to jump by 67% from the same period one year ago over 13.1 trillion won or $11.4 billion, which is new all-time high, said analysts.

Analysts also believe that profit for the July through September quarter will be higher predicting 13.8 trillion won.

Strong sales of its smartphone Galaxy S8 launched during April likely gave the company another boost keeping it in front of rival Apple as the top maker of smartphones in the world.

The sales performance of the S8 has helped to reassure investors who were shaken from last year’s Galaxy Note 7 problems with batteries that were prone to cause fires.

Samsung shares closed in on new records highs on Tuesday and have increased over 30% in 2017 after increasing over 46% during 2016.

Samsung expects to sell close to 49 million S8 phones before it completes one full year in the market, which is in line with sales for the first year of its Galaxy S7.

The company on Friday will issue its earnings guidance but is not planning to disclose any details on performance until the latter part of July.

It is expected that DRAM chip prices will keep rising during the 2017 second half due to the supply being limited and the strong demand caused by servers.

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