Samsung flags record US$80 billion quarterly profit on AI chip demand
Samsung Electronics projected a record quarterly operating profit of 107.4 trillion won (US$80.17 billion), a nearly nine-fold jump, driven by booming AI chip demand. The company cited tight memory supply and expects the imbalance to persist into 2028, though risks from Chinese competition and US ta
Samsung Electronics on Thursday projected a record quarterly operating profit of 107.4 trillion won (US$80.17 billion) for the July-September period, a nearly nine-fold jump from a year earlier, as booming demand for artificial-intelligence chips drove strong memory sales.
The world's largest memory chipmaker estimated the operating profit in a regulatory filing, slightly ahead of an LSEG SmartEstimate of 106.1 trillion won. The forecast marks Samsung's fourth straight quarter of record operating profit, underscoring a deepening global memory chip shortage as AI infrastructure investment outpaces supply growth, which has driven chip prices up sharply.
Third-quarter revenue would likely rise 127 per cent to 195 trillion won from a year earlier, Samsung said. The company will release detailed results, including a breakdown of earnings by business division, on October 29.
"There were uncertainties surrounding Samsung's earnings as analysts cut their estimates, but the results turned out to be better than expected," said Lee Jae-won, an analyst at Yuanta Securities. Lee said investors would also be closely watching for details of Samsung's shareholder return policy during its earnings call later this month.
Memory chips are expected to account for the bulk of the earnings improvement. Analysts expect supply to continue to lag demand, with the imbalance potentially widening in 2027 as AI-related demand absorbs an increasing share of global memory capacity. Douglas Kim of Douglas Research Advisory estimated that Samsung's high-bandwidth memory bit shipments expanded by close to 50 per cent quarter-over-quarter in the third quarter.
Samsung and US rival Micron have said the imbalance could persist into 2028, although rising costs, Chinese competition and potential US semiconductor tariffs pose risks to the longer-term earnings outlook. A stronger South Korean won may also offset some gains by reducing the value of dollar-denominated overseas sales when converted into local currency.
The memory chip boom also presents a challenge for Samsung's other businesses, particularly its smartphone and consumer electronics divisions, which face mounting pressure from higher component costs. Its contract chipmaking, or foundry, business is expected to remain loss-making because of fixed costs and low utilisation rates, though utilisation is expected to improve over the next several quarters.
In a potential boost to its foundry ambitions, AMD CEO Lisa Su said on Wednesday that the US chipmaker continues to explore partnership opportunities with Samsung. Despite the favourable supply backdrop, the longer-term expansion of Chinese memory-chip makers remains a potential challenge, though US restrictions on China's access to advanced chipmaking equipment continue to limit how quickly Chinese producers can expand.