Chip prices have fallen by one-third in the past year

The rise was fuelled by better than expected demand for its flash memory chips which feed into digital cameras and mobile phone handsets.

Samsung made a net profit of 1.84 trillion won ($1.6bn) in the three months between July and September, well ahead of expectations and 6.6% higher than during the same period a year earlier.

Sales rose 15% during the three months to 11.3 trillion won.

The strong results follow similar announcements from chipmakers Intel and AMD, heralding an upturn in the beleaguered semiconductor market.

Phone cheer

Samsung also said that its mobile phone business set a new quarterly revenue record.

Samsung is the world's third largest maker of mobile phones and has successfully doubled its global handset share to 12% in two years, overtaking European rivals Siemens and Ericsson.

The mobile phone market - like the chip market - has been stuck in the doldrums over the past few years.

But Nokia, the world's leading handset maker, on Thursday delivered an upbeat assessment of future demand and raised its expectations of global sales.