Samsung logs record-high profit as company's boss remains in jail

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Associated Press

Samsung Electronics has reported another record high in quarterly earnings thanks to the unprecedented boom in the memory chip industry and predicts another record-breaking quarter is on the horizon.

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It's a breathtaking run for a company fighting to get its leader out of jail.

The company also announced a new leadership line up and a huge capital investment plan. 

Instead of a big overhaul, the company showed its preference for stability by naming three insiders to replace three departing chief executives.

Surging mobile data traffic and the rise of cloud computing helped Samsung, the world's largest maker of smartphones, hold onto its record-breaking earnings streak even as its de facto chief and vice chairman, Lee Jae-yong, was sentenced to five years in prison after being convicted of bribery.

Hearings are underway at an appeals court as Lee, a grandson of Samsung's founder, contests the conviction for offering bribes to then-President Park Geun-hye and a close friend, allegedly to ensure a smooth transition of corporate leadership at Samsung.

For now, Samsung is reaping the fruits of massive investments during the past decade during the days of Lee's father when the highly cyclical memory chip industry was vulnerable to swings in global demand for consumer electronics products.

The South Korean company's July-September net income surged 150 per cent to 11 trillion won ($14.3 billion), compared with 4.4 trillion won a year earlier. 

Sales rose 30 per cent to 62 trillion won ($80.4 billion) while operating profit nearly tripled from the previous year to 14.5 trillion won ($18.8 billion), in line with its preview.

As global tech giants such as Amazon, Google, Microsoft, Facebook and Apple expand their data centres and invest in connected cars, artificial intelligence and cloud computing, Samsung's semiconductor division appears nearly invincible. 

It generated 10 trillion won ($12.9 billion) in operating income during the three-month period, accounting for about 70 per cent of its entire operating income. 

The prices of DRAM and NAND memory chips soared as demand outpaced tight supplies.

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