Samsung's record profits continue on the back of strong Galaxy S8 and DRAM sales

After recording its best-ever first quarter earlier this year, Samsung has managed to post record-breaking profits once again in Q2 2017. The South Korean manufacturer netted an overall revenue of $54.2 billion (61 trillion won), a year-on-year increase of 20%, or $8.8 billion (10.06 trillion won). Operating profit increased by a staggering 72.7% to $12.5 billion (14.1 trillion won), allowing Samsung to overtake Apple, who is projected to bring in $10.6 billion this quarter.

Net profit almost doubled from Q1 2017, and a lot of that is down to the strong showing of the semiconductor division. Healthy demand for high-density DRAM modules and SSDs for the enterprise segment led to a three-fold increase in profits to $7.2 billion (8 trillion won). It looks like the demand won't abate anytime soon, as Samsung expects the components division to drive growth in the latter half of the year.

Qualcomm turned to Samsung for the fabrication of the 10nm Snapdragon 835, and the South Korean manufacturer is looking to expand capacity and improve production efficiency of its 10nm node. Looking ahead, the company is settings its sights on the 8nm node and EUV.

Strong sales of the Galaxy S8 and S8+ allowed the mobile unit to post revenues of $26 billion (30.01 trillion won) and an operating profit of $4 billion (4.6 trillion won). Samsung mentioned that its 2017 flagships outsold last year's Galaxy S7 in "almost all regions," with the larger Galaxy S8+ netting over 50% of the sales.

Galaxy S8 and S8+ outsold last year's flagships in 'almost all regions'.

While Samsung sold more premium phones, the company's mid-tier and budget phones didn't do so well, leading to unchanged sales figures from Q1. Looking ahead to the third quarter, Samsung is pushing to regain lost ground in the budget segment with the Galaxy J 2017 series, and continue its dominance in the premium category with the launch of the Galaxy Note 8.

Samsung is also planning an aggressive marketing campaign for its upcoming flagship:

For the Mobile Business, earnings are forecast to decline due to increased marketing costs related to the launch of a new Note device, with reduced profit contributions from the Galaxy S8 and S8+.

Samsung is forecasting decreased profit margins for the Galaxy S8 in Q3, but the company should have no problems moving millions of units during the latter half of the year.

Harish Jonnalagadda
Senior Editor - Asia

Harish Jonnalagadda is a Senior Editor overseeing Asia at Android Central. He leads the site's coverage of Chinese phone brands, contributing to reviews, features, and buying guides. He also writes about storage servers, audio products, and the semiconductor industry. Contact him on Twitter at @chunkynerd.