Samsung Electronics' operating profits dropped by more than 30 percent on year, despite record sales, amid the weakening business environment in the semiconductor sector.

According to Samsung Electronics on Thursday, the company logged 76.78 trillion won ($54 billion) in sales and 10.85 trillion won in operating profits in the third quarter. The company’s device solutions unit, which is in charge of Samsung’s chip businesses, saw its operating profits almost halve to 5.12 trillion won compared to the previous quarter’s figure.

Samsung’s 23.2 trillion won in semiconductor business sales fell short of Taiwanese foundry firm TSMC’s third quarter sales of about 27.5 trillion won.

Samsung said its earnings in the memory chip business declined as the customers’ inventory adjustments exceeded the market expectations and the demand for consumer products remained weak. Samsung’s System LSI business posted lower profits due to the slowing demand for mobile phones and TVs. The chipmaker’s foundry business, however, posted record quarterly sales on improving production yields with advanced nodes.

The company’s smartphone and display businesses posted solid profitability, thanks to the release of its flagship products including Galaxy Z Flip 4 and Z Fold 4.

Samsung said the strong US dollar benefited the Korean chipmaker’s component businesses, leading to a total gain of 1 trillion won in the company’s operating profits.

As the semiconductor market is expected to continue struggling in the foreseeable future due to the ailing demand for IT products and macroeconomic uncertainties across the globe, Samsung plans to keep the priority on DRAM profitability and continue to carry the momentum of its foundry businesses.

The chipmaker said it expected semiconductor demand to rebound in the second half of next year, noting that it would align its supply strategy with the mid-term market outlook and reinforce its market leadership by meeting the rising demand for new interfaces such as DDR5 and LPDDR5X and for high-density products.

Despite the grim semiconductor market conditions, Samsung plans to spend 21 trillion won on expanding production facilities and upgrading infrastructure in the fourth quarter to bring up this year’s total investment to 54 trillion won.

The company also plans to spend on enhancing the infrastructure of its third and fourth plants at the Pyeongtaek site and advancing technologies such as extreme ultraviolet lithography to secure competitiveness, it said. Samsung will also invest in its foundry businesses to expand the production capability at the Taylor and Pyeongtaek factories.

The company on the same day announced that Samsung Electronics Vice Chairman Lee Jae-yong has been promoted to the executive chairman position after the board of directors approved the appointment.

The stock price of Samsung Electronics surpassed 60,000 won for the first time since Aug. 26 shortly after the appointment reports came out. The chipmaker's shares were trading at 59,800 won as of 2 p.m.