Samsung Q3 profit jumps nearly nine-fold as AI memory boom lifts chip earnings

SEOUL, Oct 8 — Samsung Electronics on Thursday projected a nearly nine-fold jump ​in third-quarter operating profit from a year earlier, beating analysts' estimates as booming demand for artificial intelligence chips drove strong memory earnings.

The world's largest memory ‌chipmaker estimated an operating profit of 107.4 trillion won ($80.17 billion) for the July-September period, compared with an LSEG SmartEstimate ⁠of 106.1 trillion won, a regulatory ​filing showed.

Samsung's fourth consecutive quarter of record ⁠operating profit, up from 12.17 trillion won a year earlier, underscores how soaring demand ‌for AI infrastructure has ‌outstripped memory chip supply growth, a gap expected to persist into 2027.

Prices ⁠have soared due to the tight supply of ⁠conventional DRAM and NAND chips as well as growing demand for high-bandwidth memory (HBM), essential for processing vast amounts of data for AI applications.

Third-quarter revenue would likely rise 127% to 195 trillion won from a year earlier, Samsung said.

The company will release detailed results, including a breakdown of earnings by business division, on October ‌29.

Memory chips are expected to account for the bulk ​of the earnings improvement. Analysts expect supply to continue to lag demand, with the imbalance potentially widening in 2027 as AI-related demand absorbs an increasing share of global memory capacity.

Against that backdrop, conventional DRAM bit shipments are expected to remain broadly flat because of limited inventories, while HBM shipments could rise sharply from the previous quarter on strong demand for HBM4, analysts said.

Douglas Kim of Douglas Research ​Advisory estimated that Samsung's HBM bit shipments expanded by close to 50% quarter-over-quarter in the third ‌quarter.

However, a stronger ‌South Korean ⁠won may have offset some of those gains by reducing the value of dollar-denominated overseas sales when converted into local currency.

The memory chip boom also presents a challenge for Samsung's other businesses, particularly its smartphone and consumer electronics divisions, which face mounting pressure from ‌higher component costs.

Higher memory prices, ​while benefiting Samsung's semiconductor arm, are raising costs ‌for its own smartphones ⁠and other electronic ​devices, squeezing margins in those businesses.

($1 = 1,339.5700 won)

(Reporting by Heekyong Yang and Joyce Lee; Editing by ​Sonali Paul)

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