Samsung projects record $80 billion Q3 operating profit on AI chip demand

Samsung Electronics has forecasted a record-breaking $80.17 billion operating profit for the July-September quarter, marking the highest quarterly operating profit in history for a technology company. The projection, disclosed on Thursday, indicates a nine-fold surge in operating profit compared to the previous year, according to Reuters.

The surge is fueled by robust sales of memory chips and soaring demand for artificial intelligence infrastructure, which is outpacing chip supply and driving up prices. The forecast surpasses the 106.1 trillion won average estimate from LSEG SmartEstimate and marks Samsung's fourth consecutive quarter of record operating profit.

The tech giant, the world's largest memory chipmaker, projects a 127% YoY increase in third-quarter revenue to 195 trillion won. However, the moderation in memory prices is drawing attention after a year-long rally boosted profit margins to record highs for Samsung, SK Hynix, and Micron. Despite the optimistic earnings forecast, Samsung shares remained largely unchanged in early trading, slipping 0.2% compared to a 0.5% decline in South Korea's KOSPI index.

The company is set to unveil its detailed third-quarter results on October 29, which will provide insights into earnings by business division and its shareholder return policy during its upcoming earnings call. This outlook comes as the global semiconductor industry adapts to the surge in demand for AI chips. Nairametrics reported that AI-driven memory chip shortages may lead to higher smartphone prices due to semiconductor manufacturers shifting production towards high-bandwidth memory (HBM) used in AI accelerators.

Additionally, Samsung secured a $16.5 billion deal to produce AI semiconductors for Tesla, bolstering its foundry business as it competes with Taiwan Semiconductor Manufacturing Company (TSMC) in advanced chip manufacturing.