The Zhitong Finance App learned that preliminary data released by Samsung Electronics on Thursday showed that operating profit for the third quarter up to September was about 107.4 trillion won (about 80.1 billion US dollars), more than eight times that of the same period last year, setting another record, mainly driven by demand for high-bandwidth memory (HBM). However, this performance is still about 1% lower than analysts' average forecast of 108.7 trillion won. Revenue for the quarter was 195 trillion won, up nearly 127% from the same period last year, and also below expectations. As a comprehensive Korean company spanning chips and smartphones, Samsung is facing pressure to tighten consumer electronics profit margins due to rising component prices.
Neil Shah, vice president of research at Counterpoint, said: “These data are very robust. Samsung still has a lot of cards to play in HBM next year because the full effect is not yet fully visible.”
Record profits and high expectations highlight how the AI boom has clearly biased the economy of the memory chip industry in favor of Samsung, SK Hynix, and Micron. Data center developers are racing to lock down memory chips for AI servers. Counterpoint Research raised the DRAM price month-on-month increase forecast for the third quarter from 5% to 10% to 20%, saying that customers are placing orders in advance and suppliers are increasing their pricing power.
This boom has transformed Samsung's semiconductor business. A few years ago, the business also fell into losses due to low demand; today, AI infrastructure construction is absorbing a large amount of advanced DRAM, and Samsung is also narrowing the gap with SK Hynix in the HBM field. HBM is a key chip used in conjunction with AI accelerators such as Nvidia. South Korea's trade data also showed that semiconductor exports more than tripled year on year in September.
Analysts on average expect that Samsung's chip division will achieve operating profit of 110 trillion won, while the consumer electronics division will record losses. Samsung, headquartered in Suwon, will release its full financial report on October 29th. Although the company announced record results in July, its stock price is still about 25% below its peak in June, indicating that investors still have doubts about the chip industry, which is in a boom-bust cycle. Both Samsung and SK Hynix are currently expanding production capacity and increasing investment in AI companies to drive demand for their products.