Samsung Q3 profit seen surging nearly nine-fold as AI chip demand soars

Two of Asia's leading chipmakers, Samsung and TSMC, have reported unprecedented profits this quarter, fueled by the surging demand for artificial intelligence technology. Samsung anticipates its operating profit for the third quarter to reach an all-time high of $80.2 billion, marking a staggering 782.5% increase from the previous quarter and a 700% rise compared to the same period last year.

If confirmed, this would set a new record for the biggest quarterly operating profit by a technology company, surpassing Nvidia's $63.7 billion in their latest quarter. This achievement marks Samsung's fourth consecutive record quarter. Analysts had forecasted a profit of $70.6 billion for Samsung. Meanwhile, TSMC reported a record quarterly revenue of $46.8 billion, a 51% increase year-on-year, and a 17.6% increase from the previous quarter.

The company's sales are projected at $145.6 billion, a 127% rise compared to the previous year. TSMC's success is attributed to the growing AI data centers that are purchasing high-bandwidth memory and stacked chips, which are essential components of AI processors, and the limited supply and rising prices of DRAM and NAND memory.

Despite the impressive results, both Samsung and TSMC's stocks closed lower than their previous prices, as some investors questioned the sustainability of the memory boom. South Korea's export boom, driven by the global demand for AI hardware, has contributed to a record export growth of 60.9% year-on-year, with the country's GDP expanding 12.9% in the second quarter.

TSMC will release its full third-quarter results and outlook on October 15, followed by Samsung's detailed figures on October 29, while Nvidia's earnings are expected in November, providing crucial insights into the longevity of the AI chip rally.