Samsung Electronics announced that its third-quarter 2017 results showed revenue of 62.05 trillion won and an operating profit of 14.53 trillion won. Both revenue and operating profit marked their highest quarterly figures ever.

Third-quarter revenue increased by approximately 30% year-on-year due to the continued boom in the memory market and expanded sales of flexible OLED panels. Operating profit also increased by 9.3 trillion won year-on-year as profitability in the semiconductor business improved and smartphone sales recovered. Compared to the previous quarter, revenue increased by 2% and operating profit by 0.47 trillion won.

The components business saw a significant improvement in performance due to strong memory prices and expanded sales of high-value LSI products, but the display business slowed compared to the previous quarter despite increased sales of flexible OLED panels, due to factors such as increased ramp-up costs for new lines.

In the Set business, while sales volume increased in the wireless sector due to strong sales of the Galaxy Note 8 and new J series products, profit decreased compared to the previous quarter due to an increased proportion of mid-to-low-priced products. The CE business saw improved performance compared to the previous quarter driven by strong sales of premium products.

In the fourth quarter, earnings growth is expected to continue, driven by the components business, and the set business is also seeing sales of premium products.
Solid performance is expected due to expansion. In 2018, the company's overall performance is expected to continue growing due to the strength of the components business, including the continued strong performance of memory and the growth of OLED panel sales.

The Set Business plans to focus on securing profitability through differentiated flagship smartphones and the restructuring of its high-value-added TV lineup, while actively pursuing the strengthening of capabilities in new growth engines related to artificial intelligence (AI) and IoT.

In the third quarter, the semiconductor business achieved sales of 19.91 trillion won and an operating profit of 9.96 trillion won. Demand increased due to the seasonal peak and the trend toward higher memory capacities, while prices continued to rise due to overall industry supply constraints.

Samsung Electronics maintained solid performance by expanding the supply of high-value, high-capacity memory products through the full-scale mass production of 64-layer 3D V-NAND at its Pyeongtaek complex to respond to the launch of new flagship smartphones and the growing demand for SSDs for data centers.

Due to the seasonal peak, demand for DRAM increased across all applications, including servers, PCs, and game consoles, compared to the previous quarter, and performance improved due to the sales of differentiated products such as high-capacity server DRAM of 64GB or more and LPDDR4X using 10nm-class DRAM.

System LSI saw improved performance as mass production of smartphone OLED display driver chips (DDI) began in earnest and the supply of image sensors to Chinese smartphone manufacturers expanded. In addition, the foundry business achieved solid results with increased sales of premium 10nm mobile APs and LSI products.

Samsung Electronics is investing in the expansion of Pyeongtaek Line 1 to expand V-NAND supply centered on the Pyeongtaek complex and to respond to the timely development of 5th generation V-NAND. We plan to further strengthen the competitiveness and market leadership of our memory business by expanding the transition to advanced 10nm-class DRAM processes and introducing high-capacity differentiated products.

In addition, System LSI is expected to continue improving performance due to increased shipments of image sensors and OLED display driver chips (DDI), and
Foundries build advanced EUV infrastructure.

OLED to become mainstream mobile displays next year

The display business recorded sales of 8.28 trillion won and an operating profit of 0.97 trillion won in the third quarter. Although sales in the OLED sector increased, driven by flexible products following the launch of new flagship products by major clients, performance declined compared to the previous quarter due to increased costs associated with the expansion of new OLED lines and intensified price competition between rigid OLED and LCD panels.

Performance in the display business in 2018 is expected to grow compared to this year. OLED is expected to become mainstream in mobile displays next year. Samsung Electronics plans to respond promptly to the demand for flexible displays from major smartphone manufacturers.

In the third quarter, the IM division recorded sales of 27.69 trillion won and an operating profit of 3.29 trillion won. Although the wireless business saw an increase in overall smartphone sales volume due to the launch of the Galaxy Note 8 and strong sales of the Galaxy J series, sales and operating profit decreased compared to the previous quarter as the proportion of mid-to-low-priced products increased.

The smartphone market is expected to recover its growth momentum in 2018, but intensified competition among companies and rising material costs are expected to continue.

In the third quarter, the CE division recorded sales of 11.13 trillion won and an operating profit of 0.44 trillion won. Although TV performance declined compared to the same period last year due to rising panel prices, it improved significantly compared to the previous quarter thanks to an increased proportion of premium products. In addition, with the full-scale expansion of QLED TV sales, it recorded a market share of over 40% in the extra-large market of 60 inches or larger, maintaining a firm leadership in the premium market.

While sales in the home appliance sector grew compared to the same period last year due to expanded sales of premium products such as air conditioners and washing machines, operating profit decreased due to factors including investment costs incurred in the North American B2B market.

In 2018, demand for UHD and extra-large TVs is expected to continue growing compared to this year due to the influence of major sporting events such as the World Cup and the Winter Olympics. Samsung Electronics plans to actively respond to this demand while simultaneously pursuing improved profitability by expanding its lineup centered on high-margin premium products.

The home appliance division plans to actively pursue performance growth next year by strengthening collaboration with distributors and continuously expanding its B2B business, including built-in appliances and system air conditioners, as well as online sales.