Samsung Electronics last year achieved a record operating profit of W53.6 trillion (US$1=W1,070).
Operating profit almost doubled from the W29 trillion achieved in 2016, according to preliminary results released Tuesday. Sales also reached a record of W239.6 trillion.
In the fourth quarter of last year, the electronics giant also posted its best-ever performance with sales of W66 trillion and operating profit of W15.1 trillion.
The stellar earnings were mostly due to soaring sales of semiconductors. The semiconductor industry goes through boom and bust cycles every four to five years, and a so-called super cycle that started in early 2017 continued until the end of the year.
A whopping 65 percent of last year's operating profit was generated by memory chips, and 70 percent in the fourth quarter. In the two previous years, semiconductors accounted for around 45 percent of operating profit. Due to this heavy reliance on chips, a bust cycle could lead to disastrous results.
The outlook is mixed. Morgan Stanley in a report in November last year warned of a semiconductor glut just around the corner. According to market researcher Gartner, Samsung's prowess in semiconductor sales, which enabled it to beat Intel to the global No. 1 spot, is "built on sand" and warned that it will not be able to hold the lead for long due to an impending drop in semiconductor prices.
But domestic brokerages said Samsung will power on at least one more year due to its oligopolistic market standing and technological lead over Chinese rivals.
Samsung's earnings growth has already slowed in smartphones, TVs and home appliances. Its global smartphone market share fell from 24.7 percent in 2014 to below 20 percent this year as Chinese rivals Huawei, Oppo and Xiaomi boosted their slice of the pie.
Samsung has dominated the world's TV market for 11 years, but global sales have fallen below 50 million units.
Samsung faces the daunting task of searching for new growth engines while its de facto chief remains in jail. Samsung's share price fell 3.11 percent on Tuesday even as the company announced its record earnings, continuing a downtrend.