Samsung Electronics Co. is expected to report a record third-quarter profit on Friday thanks to an extended boom in the global memory chip market and brisk sales of its latest smartphone Galaxy Note 8, market analysts said.

According to data provider FnGuide on Tuesday, the South Korean tech mogul’s operating profit in the July-September period was estimated at around 14.1 trillion won ($12.4 billion), which would be the company’s highest-ever quarterly operating profit. Some local brokerages, including Eugene Investment & Securities and Kiwoom Securities, have even upped the estimate to 15 trillion won, citing an extended gain in memory prices.

Operating income for the company’s semiconductor unit alone was forecast to reach 10.5 trillion won, a threefold increase from last year’s 3.4 trillion won, according to Eugene Investment & Securities.

The semiconductor market has entered into the so-called super cycle as supply for memory chips fails to keep up with explosive demand amid the economic recovery and a growing appetite for high-capacity memory chips.

In particular, the voracious demand from China has significantly pushed up memory prices. DRAM prices in October now average $37, up 61 percent compared to the second half of last year. This was mainly driven by Chinese smartphone makers who agreed to buy DRAM chips in the fourth quarter at a price 15 percent higher than the market price amid a shortage of high-capacity DRAM chips, which take longer and are more difficult to produce than conventional chips, according to an industry insider.

Upbeat sales in Samsung Electronics’ new smartphones are also boosting expectations of a record profit. Market analysts had previously forecast weak sales of the company’s smartphones in the third quarter due to high marketing costs for the new Galaxy Note 8 and intense competition from Apple’s iPhone X.

But sales of the Note 8 have soared as the release date of the iPhone X was pushed back due to component issues. Pre-orders for the Note 8 in the September 7-14 period were double those of its predecessor at 850,000 units, an all-time high among the Note series.

Samsung Electronics’ IT & Mobile division is expected to post 3.1 trillion won in operating profit in the third quarter, a thirtyfold jump from the same period last year when it suffered major losses from the discontinuation of the fire-prone Note 7.

Shares of Samsung Electronics closed Wednesday up 3.14 percent at 2,723,000 won.

By Moon Il-ho

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