SOUTH Korean tech giant Samsung Electronics has defied the global supply chain challenges to forecast a near-30% jump in third-quarter operating profits today.

The biggest smartphone maker in the world said it expected its operating profits to reach around ₩15.8 trillion (RM55.2 billion) in a regulatory filing, up 27.9% year-on-year.

The company is the flagship subsidiary of the giant Samsung group, by far the largest of the family-controlled empires known as chaebols that dominate business in South Korea, the 12th largest economy in the world.

The conglomerate’s overall turnover is equivalent to a fifth of the country’s gross domestic product.

Samsung Electronics estimated sales for the July-September period at ₩73 trillion, up 9.0% year-on-year – a record for any quarter, a spokesman told AFP.

The coronavirus has wreaked havoc on the world economy, with lockdowns and travel bans imposed around the globe for many months.

But the pandemic – which has killed around 4.8 million people worldwide – has also seen several tech companies boom.

Coronavirus-driven working from home has boosted demand for devices powered by Samsung chips, as well as home appliances such as televisions and washing machines.

Now, supply chain problems are hitting economic activity around the world, with companies facing shortages of key commodities, components and shipping capacity.

But weakness in the South Korean won against the US dollar has boosted Samsung’s profit margins, particularly in its smartphone business, according to analysts.

The currency effect has offset troubles caused by “disruptions in smartphone shipments”, which were triggered by parts shortages and coronavirus lockdowns in Vietnam and India, where Samsung has production lines, said Hana Financial Group in a report.

But forward prospects are looking less rosy, said analysts, with demand for DRAM memory chips – a key Samsung product – expected to fall in the fourth quarter, as manufacturers struggle with supplies, pushing down prices.

“With the coronavirus spreading again in Southeast Asia and an ongoing electricity shortage issue in China, a disruption in any of the production line can disrupt the whole production process,” said Cape Investment & Securities analyst Park Sung-soon.

“With parts running short, demands for memory chips will decrease as well because companies cannot produce set products.”

The operating profits estimate was in line with analyst forecasts according to Bloomberg News.

Samsung Electronics shares closed down 0.1%. – AFP, October 8, 2021.