OT Chips Push Up Electronic Firm’s Profits
By Phil Waller, City Staff, PA News
Fri 17 Oct 2003
12:27pm (UK)
Electronics group Samsung said today an “explosive increase” in sales of memory chips for mobile phones and digital cameras had helped it unveil a higher-than-expected rise in quarterly profits.
The firm, whose UK electronics division has its headquarters in Chertsey and a business telecoms arm in Manchester, said revenues in its flash memory chip division grew by 40% to £1.3 billion.
That helped the South Korean group’s net income in the third quarter to rise to about £955 million, on a 77% rise in operating income to £1.06 billion and a 15% rise in sales to £5.7 billion.
Samsung said the strong performance was noteworthy because it was achieved despite falls in the US dollar, soaring oil prices and faltering domestic consumption.
Samsung makes products including computer monitors, fax machines, digital cordless telephones, microwave ovens, mobile phones and MP3 Internet music players.
Samsung Electronics entered the UK market in 1984 and now has a turnover of more than £300 million and employs 120 staff.
Since the opening of the UK headquarters, additional sites have been added including an European customer service and distribution centre in Telford, a research centre in Middlesex and a manufacturing plant in Wynyard.
The UK business has five product divisions covering consumer electronics, telecoms, fax machines and printers, computer peripheral products and notebook personal computers.
The group’s three mainstay divisions – memory chips, mobile phones and TFT liquid crystal displays – all set new quarterly revenue records.
Samsung said the revenue growth in its flash memory chip division was unprecedented.
“Samsung is well on its way to realise its recently-announced goal of becoming the number one flash memory maker by 2004,” the group said.
The group’s telecommunication network business, which includes the mobile phone division, also had a good quarter with 17.7% growth in revenues to £1.9 billion.
Strong demand for high end mobile phone handsets with colour screens, cameras and camcorder functions drove unit sales up by 25% during the second quarter.
The news comes after the world’s biggest mobile phone maker, Nokia, signalled further growth for the handset market yesterday.
Sales in Samsung’s TFT LCD division, which is seen by some as the next generation driver of the IT industry, increased by 26% to £727 million.
