Samsung Q3 profit jumps nearly nine-fold as AI memory boom lifts chip earnings

Samsung Electronics revealed an extraordinary surge in third-quarter operating profit, nearly nine times higher than a year prior, surpassing analysts' expectations. The South Korean tech giant credited soaring demand for artificial intelligence chips and memory earnings for the impressive growth. With an estimated operating profit of 107.4 trillion won for the July-September period, Samsung's profit marks its fourth consecutive quarter of record earnings, up from 12.17 trillion won in the same quarter last year.

This record profit surge underscores how the explosive demand for AI infrastructure has outpaced memory chip supply growth, a disparity analysts anticipate will endure through 2027. The tight supply of conventional DRAM and NAND chips, coupled with rising demand for high-bandwidth memory (HBM), essential for processing massive data amounts for AI applications, has driven prices up.

Samsung anticipates its third-quarter revenue to climb by 127% to 195 trillion won compared to a year earlier. Company officials will disclose comprehensive results, including earnings breakdown by business division, on October 29. Memory chips are expected to contribute the lion's share of the earnings improvement, with supply likely to keep lagging demand, potentially widening the gap by 2027 as AI-related demand consumes a larger share of global memory capacity.

Analysts predict Samsung's conventional DRAM bit shipments will remain steady due to limited inventories, while HBM shipments may surge sharply, particularly due to strong demand for HBM4. However, the memory chip boom could pose challenges for Samsung's other businesses, particularly its smartphone and consumer electronics divisions, as higher component costs squeeze margins.