Samsung's Q3 Profit Surge: AI Chip Demand Drives Strongest Performance in Three Years

Samsung Expects Biggest Quarterly Profit In 3 Years - Samsung Electronics Co (OTC:SSNLF)

Samsung Electronics (OTC:SSNLF) is set to report its largest quarterly profit in more than three years, driven by the global surge in AI chip production. This heightened demand has constrained the supply and elevated prices of conventional memory chips, which remain central to the company's business. The South Korean tech giant, a key competitor to Taiwan Semiconductor Manufacturing Co. (NYSE:TSM), anticipates operating income of 12.1 trillion won ($8.5 billion) for the September quarter, marking a 31.8% increase from a year earlier. Revenue is expected to climb 8.7% to a record 86 trillion won. Analysts point to high-bandwidth memory (HBM) as a key growth driver. Sanjeev Rana of CLSA Securities Korea told Bloomberg that Samsung's HBM shipments jumped 70-80% from the previous quarter, and he added that writedowns in the company's foundry business were likely smaller than initially expected. Also Read: Samsung Returns To Nvidia Supply Chain After 19 Months Samsung may have reclaimed its spot as the top memory maker in terms of revenue after AI-related investments bolstered prices and sales volumes of general-purpose DRAM and NAND, said MS Hwang, research director at Counterpoint, speaking to Bloomberg. He added that shipments of HBM3E chips to Nvidia (NASDAQ:NVDA) currently have a limited impact but stressed that sustaining momentum into HBM4 will be critical to regain its previous market leadership. Ryu Young-ho of NH Investment & Securities told Reuters that robust sales of conventional memory for general-purpose servers, alongside high-bandwidth memory demand for AI servers, underpinned overall growth. Sohn In-joon of Heungkuk Securities highlighted that higher-than-expected prices for commodity DRAM and NAND, driven by tight supply and strong data center demand, further boosted earnings. Analysts also noted that improved utilization rates, narrower losses in Samsung's foundry unit, and fixed-cost efficiencies supported profitability. DRAM prices, in particular, have surged more than 170% year-over-year amid ongoing supply shortages, which analysts expect to persist into 2026. Analysts, as reported by Reuters, expect Samsung's HBM sales to improve after the company's 12-layer HBM3E chips were approved for use in Nvidia's GB300 systems. Although initial shipment volumes are expected to be limited, this marks a significant win for Samsung in the HBM market, where it has lagged behind rival SK Hynix. Looking to the future, Samsung is focusing on its next-generation HBM4 products to close the market share gap. The company is reportedly on track with its HBM4 development, working with major U.S. customers, and expects commercial shipments to begin in 2026. Strategic partnerships, including the Stargate project with OpenAI and chip-supply agreements with Apple (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA), are also expected to bolster revenue and reduce losses in the company's foundry business. Read Next: Qualcomm Gains $2 Billion Boost From Samsung S25 Chipset Deal, Analyst Highlights Growth in Handsets and Beyond Photo by Sybillla via Shutterstock SSNLFSamsung Electronics Co Ltd$42.480.34%OverviewAAPLApple Inc$246.14-0.61%NVDANVIDIA Corp$181.05-3.86%TSLATesla Inc$419.17-3.84%TSMTaiwan Semiconductor Manufacturing Co Ltd$293.44-3.12%Market News and Data brought to you by Benzinga APIs

Samsung rides global AI boom to its biggest profit since 2022

Samsung Electronics has posted its biggest quarterly profit in more than three years, reflecting booming memory chip demand while AI development accelerates globally. South Korea's largest company reported an operating profit of 12.1 trillion won ($8.5 billion) in the September quarter, compared with analysts' projection for 9.70 trillion won, according to a preliminary earnings report released on Tuesday. Revenue climbed to 86 trillion won. The company will provide a full financial statement with net income and divisional breakdowns later this month. The results may bolster confidence among investors betting on the durability of demand for AI servers and memory chips. Samsung's shares have surged more than 60% since early June, buoyed by signs of recovery in its pivotal semiconductor division, which typically accounts for 50% to 70% of the company's annual profits. Samsung is seeking to position itself to ride the anticipated AI boom in the coming years. It has made progress with its latest high-bandwidth memory chips, securing an order from Advanced Micro Devices while awaiting final approval on HBM3E chips from Nvidia. Investors are betting that Samsung can catch up with smaller rival SK Hynix in the supply of HBM to Nvidia and others for AI applications. This month, both South Korean industry linchpins struck agreements to supply chips to OpenAI's Stargate project. Their projection for demand represented more than twice the current global capacity of HBM, underscoring Stargate's enormity and quickening global AI development. That, together with rising memory chip prices, has prompted dozens of analysts to lift their price targets for Samsung recently. Samsung's advances come after years of setbacks, including development missteps that allowed SK Hynix to take a huge lead in the lucrative AI arena. Samsung said during its most recent earnings call in July that it expects "meaningful expansion" in high-end memory products for servers in the second half of the year.

Samsung sees stronger-than-expected Q3 profit on AI chip demand By Investing.com

Investing.com-- Samsung Electronics Co Ltd (KS:005930) on Tuesday flagged a stronger than expected profit for the third quarter, as the world's largest memory chip maker benefited from strong artificial intelligence-linked demand. Samsung forecast third-quarter operating of around 12.1 trillion won ($8.4 billion), higher than Reuters expectations of 10.1 trillion won. The figure was higher than Q3 2024's operating profit of 9.18 trillion won. Consolidated sales are expected at 86 trillion won, Samsung said, higher than the prior year's reading of 79.1 trillion won. The stronger earnings were largely driven by a broad recovery in memory chip demand, especially amid increasing demand for AI-linked servers and chips. Demand for conventional memory, such as DRAM and NAND products, was also seen improving from a trough seen over the past two years. Samsung is expected to begin supplying advanced high-bandwith memory chips to major AI chip manufacturers in the coming quarters, having recently cleared NVIDIA Corporation's (NASDAQ:NVDA) requirements for HBM. Samsung will release its full third-quarter results later in October.

Samsung Expects Strongest Profit in Three Years on AI-Driven Chip Demand -- Update

Samsung Electronics expects third-quarter earnings to have rebounded to a three-year high, buoyed by a recovery in its flagship semiconductor segment as the expanding artificial-intelligence industry continues to fuel chip demand. The better-than-expected guidance comes as some analysts have said that a boom in the semiconductor industry is approaching. Counterpoint Research, a Hong Kong-based global research company, attributed Samsung's solid performance largely to stronger-than-expected prices and sales of DRAM and NAND products used in a wide range of electronics, driven by AI-related investments centered around data servers. "This year, the DRAM market has experienced a series of supply shortages, starting with HBM and extending to both legacy and newer, general-purpose products," Counterpoint Research director M.S. Hwang said ahead of the preliminary results. Samsung's recent foldable-smartphone launches also contributed to its solid performance, Counterpoint said. The South Korean technology giant on Tuesday estimated an operating profit of 12.1 trillion won, equivalent to $8.48 billion, for the July-September period, the highest since the second quarter of 2022. That would be a 32% increase from a year earlier and more than double the previous quarter's figure. Third-quarter revenue likely rose 8.7% to a record 86 trillion won, Samsung said. Analysts had expected the company to guide for operating profit of 9.742 trillion won on revenue of 83.585 trillion won, according to a FactSet consensus. Shares in Samsung rose as much as 2.9% to 96,000 won before paring gains, partly on profit-taking after a recent rally. The stock remains about 75% higher this year, buoyed by expectations that the AI boom will drive chip demand for years to come. Nomura analysts led by C.W. Chung said in a recent note that investments in AI and conventional servers by big U.S. tech companies are set to boost memory-chip demand and push profit margins for DRAM and NAND products to records in 2026. The analysts predict "an unprecedented supercycle" in the memory market, expecting substantial investments to continue into 2027 and 2028. Samsung's recent business pacts, including its Stargate partnership with OpenAI to expand data centers globally as well as chip-supply agreements with Apple and Tesla, have also been fueling the upbeat outlook on the company. Such deals, if implemented, could reduce losses at Samsung's foundry business and eventually turn it around. Samsung is scheduled to release full quarterly results, including a breakdown of earnings for each of its business segments, later this month.