(LEAD) Samsung Electronics posts record profit in Q3 on AI chip supercycle

Samsung Electronics Co. Ltd. has announced a record-breaking operating profit of 107.44 trillion won ($80.5 billion) in the third quarter, driven by soaring demand for memory chips essential for artificial intelligence applications. Revenue for the quarter reached 195.25 trillion won, a 127% increase compared to the same period last year.

The company's board has also approved a 30 trillion won cash dividend for shareholders. Operating profit surged more than 780% compared to the previous year, reaching 75.15 trillion won, while net profit climbed by 515% to 75.15 trillion won. These impressive results surpass what Samsung had projected in its preliminary earnings guidance at the beginning of the month, marking Samsung as the first South Korean company across industries to achieve over 100 trillion won in quarterly operating profit.

The surge in profit is attributed to unprecedented demand for memory chips, fueled by heavy investments from hyperscalers in AI infrastructure. This demand has caused global memory chip shortages and price hikes. Samsung's Device Solutions unit, which manages its semiconductor business, accounted for the majority of the company's revenue and profit, generating 147.1 trillion won in revenue and 106.5 trillion won in operating profit.

Samsung's strong performance follows SK hynix Inc.'s similarly robust earnings report, with both companies anticipating further growth in the AI chip market despite potential funding concerns. Samsung's stock rose 2% in early trading on Thursday in South Korea. The company also announced a new partnership with French AI model maker Mistral AI, integrating AI into its semiconductor design and manufacturing processes to optimize operations.

Samsung's display business generated 8 trillion won in revenue and 1.1 trillion won in operating profit, while its MX and Networks unit, including smartphone sales, reported an operating loss of 0.6 trillion won on 37.7 trillion won in total sales. The smartphone segment's loss is attributed to rising memory chip costs, leading to higher handset prices.

However, Samsung remains optimistic about a boost in fourth-quarter smartphone sales, driven by new flagship devices like the Galaxy S26 series, Galaxy Z Fold8 Ultra, and Z Fold8 Ultra. The company will pay 30 trillion won in dividends to shareholders for the third quarter, translating to approximately 4,601 won per share.