Preemptive aggressive investment and release of unmatchable innovative cost-effective chips at a time of tight supply and explosive demand in memory to power smart devices, high-performance phones and PCs has brought bigger earnings than expected for the world’s top chipmaker Samsung Electronics.

Samsung Electronics is estimated to have earned more than 6 trillion won ($5.3 billion) from chip business in the first three months of 2017 led by a recovery in prices of mainstream chips and heated demand for next-generation memory to run high-performance computing and mobile devices.

The company on Friday announced estimated first-quarter operating profit of 9.9 trillion won, up 48.2 percent on year. Although the company did not detail income by segment in its guidance, industry experts believe the stellar first-quarter performance was largely driven by a boon in memory chip business.

Despite the release of earnings that beat market consensus, the company’s shares closed Friday 0.6 percent down at 2,080,000 won upon news of its defeat to Huawei Technologies in a Chinese court in patent litigation.

The South Korean tech giant commands unrivaled leadership in global dynamic random access memory (DRAM) chip market. According to market researcher DRAMeXchange, Samsung’s market share in global DRAM market has risen sharply in recent years, hitting 48.0 percent by 2016 from 39.6 percent in 2014 and 45.3 percent in 2015.

Samsung is also leading the global non-volatile storage (NAND) flash memory chip market. It accounts for 37.1 percent of the global NAND flash market as of the fourth quarter 2016.

Industry experts attribute the company’s dominance in the global chip market to its advanced chip-making technology. Its preemptive migration to new-generation production technology has cemented preference in Samsung chips over others.

Samsung succeeded in the commercial production of DRAM chips on 10-nanometer class technology for the first time in the industry and began mass-producing 8-gigabit double-data-rate 4 (DDR4) DRAM chips on 10-nanometer (nm) process last year. It also applied 3D solutions to produce high-performance V-NAND memory.

The industry believes the memory chip market since the latter half of last year has entered a new super cycle, a period of an upturn as the result of replacements with high-performance memory in PCs and strong demand for mobile devices.

The average selling price of DDR4 DRAM chips used in PCs soared to $2.75 as of the end of last year from $1.31 six months earlier. Demand also has been heated as NAND flash typically used to power mobile devices is increasingly preferred as a reliable substitute for a hard disc drive.

Other component and set business also aided the company’s second best-ever profit in the first quarter.

The display division that posted losses in the first quarter last year is expected to have earned 1.4 trillion won in operating income thanks to increased demand in organic light emitting diode (OLED) displays and strengthening in liquid crystal display panel price. It posted an operating profit of 1.2 trillion won in the third quarter and 1.3 trillion won in the fourth quarter last year.

The mobile phone unit is estimated to have generated nearly 2 trillion won in operating profit for the first quarter, falling from 3.9 trillion won year-ago period but relatively decent when considering the discontinuation of Galaxy Note 7. The mobile business is expected to turn out strong figures from the second quarter upon the release of Galaxy S8 series.

The home appliance unit is also expected to have earned 300 billion won on brisk sales of its high-end TV and washers.

By Kim Dong-eun

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