Seoul, Oct 27 (IANS): Samsung Electronics on Thursday posted a sharp drop in profits for the third quarter, as its main semiconductor business faced major headwinds from weakening memory chip prices and demand.

The world's largest memory chip and mobile phone maker said in a regulatory filing its third-quarter net profit declined 23.6 per cent from a year earlier to 9.38 trillion won ($6.6 billion), reports Yonhap news agency.

Its operating profit for the July-September period fell 31.4 per cent on-year to 10.85 trillion won.

Revenue increased 3.8 per cent to 76.78 trillion won, a record for a third quarter.

The semiconductor division, the heart of Samsung's businesses that accounted for nearly 70 per cent of its total profit in the previous quarter, slumped nearly 50 per cent on-year to 5.12 trillion won, as weakened consumer spending power led to a cut in demand for chips from electronics makers, as well as cloud computing and server companies.

"Customers' inventory adjustments exceeded market expectations and demand for consumer products continued to weaken," Samsung said.

But its foundry, or contract chip manufacturing, business posted record quarterly sales and operating profit on "improving yields in advanced nodes," the company said in a statement, without providing exact numbers.

Samsung said its mobile business posted an operating profit of 3.24 trillion won, up from 2.62 trillion won on-quarter on sales of flagship products, including foldables, as well as new wearables, but the figure was slightly down from last year's 3.36 trillion won.

Samsung's display panel business logged solid performance on growing demand following the release of new flagship smartphones, but its large panel business posted losses on slowing TV and PC monitor sales.

Despite weaker demand, the company stood by its previous position that it would not cut back on chip production.