SAN FRANCISCO — South Korean electronics powerhouse Samsung Electronics Co. Ltd. said Friday (July 7) it expects to record a record profit of about 14 trillion Korean won (about $12.1 billion) for the second quarter as surging memory chip prices boost the company's bottom line.

Samsung (Seoul) said it expects its profit to increase 72 percent compared with the second quarter of 2016. The firm said sales rose to an estimated 60 trillion won (about $52 million), an increase of 18 percent compared with the year ago period.

Memory chip prices have been on the rise since late last year as tight supply in DRAM and NAND flash memory have chip vendors scrambling to add capacity. Flash memory chips are also finding uses in more applications, such as consumer electronics and solid state drives, leading to higher consumption.

According to DRAMeXchange, a market research firm that tracks memory chip pricing, there is no easing of DRAM and NAND undersupply on the immediate horizon. The firm predicts that DRAM average selling prices will rise another 5 percent in the third quarter, while the average selling price of NAND chips surged by 20 to 25 percent in the first quarter.

Samsung said earlier this week that it plans to invest $18.6 billion in semiconductor and display production facilities. The company also said its newest chip fab line in Pyeongtaek, South Korea, began mass production and has shipped its first product to customers.

Market watchers expect the surging memory prices in 2017 will enable Samsung to displace Intel Corp. from the No. 1 spot in semiconductor sales. Intel has been No. 1 in chip sales for more than two decades.

—Dylan McGrath is the editor-in-chief of EE Times.

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