Samsung's Q3 profit seen jumping nine-fold, but chip margins may be flat

Samsung Electronics anticipates a significant increase in operating profit for the third quarter, nearly nine times higher than the previous year, driven by strong demand for artificial intelligence (AI) technology. However, analysts have lowered their forecasts by nearly 8 per cent since the end of August. The world's largest memory-chip maker projects operating profit of 106.1 trillion won ($79.1 billion) for the July-September quarter, up from 12.17 trillion won a year earlier.

Despite rising costs and a strengthening South Korean won, Samsung expects to maintain its operating profit margin at 76 per cent in the third quarter, the same as the previous quarter. Chipmakers predict the ongoing memory shortage, which began over a year ago, will persist into next year and possibly through 2028. The pace of price increases has slowed in the third quarter, raising concerns about the durability of the AI spending boom and whether chip margins have reached a peak.