Tim Culpan is a technology columnist for Bloomberg Gadfly. He previously covered technology for Bloomberg News.

Investors may be cheering a revival in Samsung Electronics Co.'s handset business, but it wasn't smartphones that drove earnings in the second quarter.

Rather, it was the South Korean company's extraordinary dominance in memory chips that accounted for the lion's share of growth in both revenue and operating profit for the period. Almost 80 percent of sales in the semiconductor business came from memory; the chip business made up 91 percent of the increase in operating earnings.

Earnings Driver
Memory chips were the biggest contributor to Samsung's revenue and operating profit growth in the second quarter
Source: Samsung, Bloomberg Gadfly
Note: Sales figures are for memory chips, operating profit figures are for all chips.

While strength in mobile handset sales indicates last year's battery crisis is behind it, Samsung's fortunes now are uncomfortably tied to a cyclical business that is leveraged to revenue. That makes the company a massive winner when demand and prices are strong, but exposes its P&L when the good times end.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Tim Culpan in Taipei at

To contact the editor responsible for this story:
Paul Sillitoe at