Samsung, AMD report strong quarterly growth driven by chip business
Sustained high chip demand pushed record profit levels
AMD and Samsung Electronics have posted strong third-quarter results thanks to sustained strong demand for chips, while ServiceNow is also celebrating a "fantastic quarter".
The robust performance of its key chip business, and display sales for new flagship smartphone launches, boosted Samsung's Q3 earnings.
The company reported 15.8 trillion won (£9.8 billion) of operating profit on 74 trillion won (£45.9 billion) of revenue. Revenue was up 10 per cent YoY and the operating profit was the company's best result since Q3'18 - and its second-highest ever.
The company's chip business was mainly responsible for its robust performance. Chips have continued to exhibit solid growth, with increasing memory chip prices, enhanced yield rates and better profitability at Samsung's chip contract manufacturing business.
As the world's largest chip manufacturer, high prices for memory chips mean increased profits for Samsung, even if increasing costs for raw materials and logistics cut into its consumer electronics division's profits.
Samsung's chip business posted 26.4 trillion won (£16.4 billion) revenue, thanks to a robust demand for PCs as companies implemented work-from-home arrangements during the pandemic.
The company's DRAM sales, mainly for servers, continued to grow - making it the leading factor for the division's performance.
The operating profit for Samsung's chip business was 10.6 trillion won (£6.6 billion), accounting for 64 per cent of the company's total operating profit in Q3.
The company says it was able to do business as usual despite the global chip shortage by 'flexibly operating its product mix'.
In addition to its chip business, Samsung's Mobile Communications Business also contributed greatly to its record-breaking third quarter. The division saw a sequential improvement in revenues, thanks to strong demand for new foldable phones like its Galaxy Z Flip 3 and Galaxy Z Fold 3, and the low- to mid-range smartphones that it produces.
Chip demand drives AMD past 50 per cent growth
This week, American chip maker AMD also announced its earnings results for the third quarter, posting $4.3 billion in revenue: up 12 per cent QoQ and 54 per cent YoY, driven by strong performance in both the Computing and Graphics segment and Enterprise, Embedded and Semi-Custom segment.
For Q4'21, AMD is forecasting $4.5 billion revenue, up 39 per cent YoY.
ServiceNow targeting $15 billion revenue
American software and digital workflow firm ServiceNow has also announced its own financial results.
ServiceNow's subscription revenues rose to $1.4 billion in Q3'21, up 31 per cent YoY. The firm now has 1,266 total customers, representing 25 per cent annual growth.
As of September 30th, 2021, ServiceNow's current remaining performance obligations were $5 billion, representing 32 per cent YoY growth.
"Q3 was another fantastic quarter with continued outperformance across all of our growth and profitability guidance metrics," said CFO Gina Mastantuono.
"The consistency of our results exemplifies the strength of our product portfolio and the team's focus on building deep customer relationships.
"We are well positioned as the workflow standard on our journey to becoming a $15+ billion revenue company."