Samsung Electronics Co. Ltd. has its flash memory chip business to thank for what looks to be another solid financial quarter, according to guidance issued early Friday in Korea.

The South Korean company said it’s expecting to set a new record profit of about 17.5 trillion won ($15.8 billion) in the third quarter, up 20 percent from the same period a year ago. Revenue is expected to come in at 65 trillion won ($57.3 billion), up 5 percent from a year ago.

Samsung didn’t provide any breakdown of the driver of its profit or revenue yet, but CNet said the company has likely benefited from strong demand for its flash memory chips, which made up about 80 percent of its earnings in the second quarter. ZDnet later reported that it expects chip profits to make up at least 70 percent of the total for this quarter.

Samsung is said to be the world’s largest semiconductor manufacturer in terms of revenue, having overtaken rival Intel Corp. to take the No. 1 spot. The firm’s memory business saw revenue increase by 33 percent in the second quarter.

What will be interesting to see is if Samsung’s smartphone business can stem the tide after seeing a 22 percent decline in revenue in the previous quarter. But expectations are low, since the company warned three months ago that it expects market conditions to “remain challenging” for the rest of the year.

The company’s display panel business is another area of interest. In the second quarter, Samsung’s profit was hurt by low demand for its OLED and LCD display panels, though the firm predicted higher demand for these products in the third quarter.

“The diversification of Samsung’s operations has paid off again: While its handset business has struggled, the memory chip business has gained so much, making the company look good overall,” said Holger Mueller, principal analyst and vice president of Constellation Research Inc. “Even when Samsung loses its handset market share, it still can grow thanks to its memory business. But in the longer run, it needs to grab more market share in handsets.”

Photo: tiffany198567/Flickr