Samsung eyes $80B quarterly profit as memory buyers pay the price
AI demand fattens chipmakers' margins while cheaper PCs and phones become harder to produce profitably
Samsung Electronics anticipates a more than doubling of revenue and nearly nine times increase in operating profit for the third quarter, propelled by the AI infrastructure surge driving demand for memory. As the South Korean firm is among the key memory producers capitalizing on demand for chips in datacenter servers and GPUs, it is projecting sales between ₩194 trillion and ₩196 trillion (approximately $145 billion) for the quarter ending September 30, 2026, which is more than double the ₩86.1 trillion ($63 billion) recorded during the same period last year.
Operating profits are expected to range between ₩107.3 trillion and ₩107.5 trillion (about $80 billion), roughly eight times the ₩12.2 trillion ($9 billion) earned in Q3 2025. While the company's guidance does not specify performance by business division, the surge in demand for memory, including high-bandwidth memory (HBM) paired with AI processors, is anticipated to be a significant contributor to the profit boost.
The escalating demand for DRAM and NAND for AI applications is driving profits across the semiconductor sector. Industry analyst Gartner predicts the sector will generate a total revenue of $1.6 trillion in 2026, nearly double the revenue witnessed in 2025. Competitor chipmaker Micron also reported comparable gains last week, and fellow Korean memory leader SK hynix is expected to echo similar results when it releases its own quarterly figures later in the month.
The booming market is proving to be expensive for purchasers of consumer electronics. Memory manufacturers' shift towards more lucrative AI products is straining supplies for PCs, smartphones, and other devices, leading to a rise in component prices. As The Register previously reported, the surge in component costs is pricing budget PCs out of the market, with US sales in that category falling by 18.7 percent year-on-year in the first quarter, and average PC selling prices expected to increase by up to 12 percent by December.
Smartphone manufacturers are facing similar pressures, with budget devices becoming progressively challenging to produce profitably. Samsung has previously warned that it anticipates the memory supply crunch to deepen in 2027 and potentially persist through 2028, leaving buyers with little reason to celebrate.
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