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Samsung Electronics has posted a record operating profit of 4.23 trillion won ($3.57Bn) in the third quarter, boosted by an encouraging turnaround of its chip and panel businesses.

The results were in line with analysts’ expectations. Year on year, an increase of 186% & a jump of 68 percent from the previous quarter was recorded. Q3 sales also reached a healthy  35.87 trillion won, up 19% year on year & 10% from the previous quarter.

The world’s top maker of memory chips and LCD panels is fast emerging from the global economic downturn, taking advantage of the crisis to pull ahead of its rivals, analysts said. However, the company expected its fourth-quarter profit to decline due to currency the appreciation of the won & also the increase of marketing costs during the year-end shopping season.

While its memory chip business is expected to post a sharp rise in profit in the October to December period, profitability for its LCD business is expected to fall.

“Samsung’s quarterly profit peaked in the third quarter & will fall in the fourth quarter,” said Dongbu Securities analyst Lee Min-hee. “Chip prices rose too fast. Price falls are inevitable,” he said.

On an annual basis, Samsung expects its 2010 profit to increase, thanks to an economic rebound.

“We expect the global recovery to drive demand growth of most of the IT & consumer electronics products. We are cautiously forecasting that our 2010 profitability may improve over that of 2009,” Robert Yi, Samsung Head of Investor Relations, said at an earnings conference call.

The company plans to increase its investments in its memory business to more than 5.5 trillion won next year. The company plans to spend a combined 4 trillion won in it’s memory & nonmemory businesses, Yi said. Samsung also moots spending of 3 trillion won in its LCD business in 2010, up from this year’s 2 trillion won, he said.

Samsung’s best ever quarterly earnings are attributed to sharp profit increases in its chip & panel businesses, and the solid profit posted by its TV & handset divisions. The semiconductor division posted an operating profit of 1.15 trillion won, helped by chip price increase & technologyl leadership. This is a sharp increase from 240 billion won the previous quarter, and 190 billion won a year ago.

Samsung’s LCD unit also saw its third-quarter operating profit surge to 1.01 trillion won, from 150 billion won in the second quarter and 450 billion won a year ago. This is mainly driven by the rebound in panel prices.

Samsung’s Telecommunication division, which includes mobile handsets, logged an operating profit of 1.03 trillion won, compared with 1 trillion won in the previous quarter & 840 billion won a year ago. Samsung said its handset market share is expected to exceed 20%for the first time in the third quarter, as it & fellow Korean manufacturer LG make further inroads into Nokia & Motorola’s market share.

Samsung executives also said Samsung looks to double the number of its smartphone models next year and increase smartphone shipments from this year’s 10 million units.

Its Digital Media & Communications division also reported an operating profit of 940 billion won, compared with 1.06 trillion won in the second quarter and an operating loss of 50 billion won a year ago. Samsung ascribed its healthy TV profit to sales of high-end TVs such as LED LCD TVs and large-sized TVs.