Samsung profit up almost nine-fold with memory chip windfall

Samsung Electronics Co reported a nearly nine-fold rise in quarterly operating profit, though that was still just shy of sky-high expectations elevated by relentless spending on the AI infrastructure buildout.

The world’s largest memory chipmaker posted a record preliminary operating profit of 107.4 trillion won ($80.1 billion) for the quarter through September. But even those record results still fell short of the average analyst’s forecast. Revenue came to 195 trillion won, also lower than expectations. Shares were flat during early morning trading in Seoul Thursday.

Technology providers are rushing to secure supplies of memory needed to power AI services. High-bandwidth memory — the critical chips used alongside Nvidia Corp and other AI accelerators — is drawing massive spending, with flash memory and low-power chips also in demand. The record numbers and high expectations underscore how sharply the economics of the AI boom have swung in favor of Samsung, SK Hynix Inc. and Micron Technology Inc.

“We remain bullish on the memory cycle and Samsung Electronics,” said Sanjeev Rana, head of North Asia semiconductor research at CLSA Securities Korea. “Demand continues to exceed supply and HBM pricing is poised for a big step up in 2027.”

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Counterpoint Research raised its forecast for third-quarter DRAM prices to a 10% to 20% sequential increase, from 5% to 10% previously, saying customers are bringing forward orders.

“Samsung is quite undervalued right now,” said Neil Shah, vice president of research at Counterpoint. “They’ve got a lot up their sleeve for next year with HBM, mostly because the full effect hasn’t even landed yet.”

The boom has transformed Samsung’s semiconductor business, which only a few years ago was grappling with losses after a punishing downturn in demand. Now, the AI infrastructure buildout is absorbing vast amounts of advanced DRAM, while Samsung is gaining ground on SK Hynix in HBM. The strength of the cycle is also showing up in South Korea’s trade data, with semiconductor exports more than tripling from a year earlier in September.

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Analysts on average estimate Samsung’s chip division will post operating profit of 110 trillion won while its electronics unit will report a loss. The Suwon-based company will release a full financial statement on October 29.

Samsung’s shares remain about 25% below their June peak even after the company reported record-breaking results in July. Investors retain a measure of scepticism around soaring profits in a sector prone to boom-and-bust cycles. Samsung and SK Hynix are now expanding production capacity while also increasingly backing companies in the AI sector in a bid to drive more demand for their products.

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