Samsung reaches new profit record with memory chip windfall

Samsung Electronics reported a record profit on Thursday, driven by surging memory chip prices and heavy investments in artificial intelligence infrastructure. The company's operating profit for the three months ending September reached about 107.4 trillion won (US$80.1 billion), more than eight times the profit from the same period last year.

Analysts had anticipated 108.7 trillion won in operating profit. Revenue for the quarter totaled 195 trillion won, slightly below expectations. The AI boom has significantly benefited Samsung, SK Hynix, and Micron Technology, as data centers scramble for memory chips to power their AI servers. Counterpoint Research raised its forecast for third-quarter DRAM prices by 10% to 20% from the previous 5% to 10%, attributing the increase to customers placing orders earlier and suppliers gaining pricing power.

This AI-driven boom has transformed Samsung's semiconductor business, which faced losses in previous years due to a sharp decline in demand. Now, the market for advanced DRAM is soaring, and Samsung is gaining ground on SK Hynix in the high-bandwidth memory sector, a critical component alongside AI accelerators. South Korean trade data shows semiconductor exports tripling compared to the previous year in September.

Analysts estimate Samsung's chip division to generate operating profit of 110 trillion won, while its electronics unit is projected to incur a loss. The company is expected to release its full financial statement later this month. While investors show some skepticism about the soaring profits in an industry subject to boom-and-bust cycles, Samsung and SK Hynix are expanding production capacity and increasingly backing companies in the AI sector to drive demand for their products.