Samsung Q3 Operating Profit Surges Eightfold, Slightly Misses Estimates

Source: Bloomberg

Samsung Electronics has posted another record profit, falling just short of sky-high market expectations driven by surging memory chip prices and a boom in AI infrastructure spending.

Operating profit for the three months ending in September rose to approximately 107.4 trillion won ($80.1 billion), more than eight times the figure from the same period last year, fueled by demand for high-bandwidth memory.

This result was still about 1% below the average analyst estimate of 108.7 trillion won, as the South Korean chip-to-smartphone conglomerate faced margin pressure in its consumer electronics division due to rising component costs. Preliminary data released Thursday showed revenue of 195 trillion won, also missing expectations.

“These numbers are solid,” said Neil Shah, Vice President of Research at Counterpoint. “They still have a lot in store for next year in HBM, mainly because the full effect hasn’t materialized yet.”

The record figures and high expectations underscore how the economic benefits of the AI boom have shifted significantly toward Samsung, SK Hynix, and Micron, as data center developers race to secure memory chips for their AI servers. Counterpoint Research raised its third-quarter DRAM price forecast from a previous estimate of 5% to 10% quarter-on-quarter growth to 10% to 20%, citing customers placing orders early and suppliers gaining pricing power.

This boom has transformed Samsung’s semiconductor business, which was posting losses just a few years ago following a period of weak demand. AI infrastructure construction is now absorbing large volumes of advanced DRAM, while Samsung is catching up to SK Hynix in high-bandwidth memory — critical chips used alongside Nvidia and other AI accelerators. The strength of the cycle is also reflected in South Korea’s trade data, with semiconductor exports in September more than doubling year-on-year.

Analysts estimate on average that Samsung’s chip division will record operating profit of 110 trillion won, while its electronics division will post a loss. The Suwon-based company is scheduled to release its full earnings report on October 29.

Despite record results announced in July, Samsung’s stock price remains about 25% below its June peak. Investors remain somewhat skeptical of profit surges in an industry prone to boom-and-bust cycles. Samsung and SK Hynix are expanding production capacity while increasingly investing in AI-focused companies to drive further demand for their products.

Original article: Bloomberg