Memory crisis puts Samsung on track for the biggest quarterly operating profit in tech history

Samsung's financial outlook is promising, with the AI-driven memory crisis driving unprecedented profits. The tech giant anticipates a staggering quarterly operating profit of $80.2 billion, marking an astonishing 782.5% year-over-year increase and becoming the first technology company to reach this milestone. This projection, amounting to 107.4 trillion won ($80.2 billion) for July through September, outpaces the previous quarter's figures by a significant margin, with operating profit climbing 20% and revenue increasing by 13.7%, resulting in an impressive operating margin of roughly 55%.

The surge in demand for memory stems from the rapid growth of AI infrastructure spending, which has allowed suppliers to raise prices. Although Samsung acknowledged supply constraints, analysts have predicted price increases of 40% to 50% in Q3, followed by another 30% to 40% in Q4. Despite these forecasts, Samsung's latest estimate falls slightly short of the 108.7 trillion won ($81.2 billion) consensus from Bloomberg analysts but still surpasses the LSEG forecast of 106.1 trillion won ($79.2 billion).

The memory crisis has impacted not only consumers but also major tech companies. Amazon raised the prices of its Kindle, Echo, Fire TV, and eero products in August, citing rising memory and storage costs. Apple and Microsoft have also passed on the increased expenses to consumers, with Apple hiking MacBook and iPad prices, and Microsoft adding $100 to the entry-level Xbox Series S and $150 to the 1TB consoles.

As Samsung's full results are expected on October 29, the full extent of the memory boom's effect on the company will become clearer.