Samsung Electronics Co. Ltd. said it expects to deliver a world record-breaking quarterly profit for the technology industry, exceeding 100 trillion won for the first time.
In a preliminary third quarter earnings report today, the company said it’s anticipating an operating profit of a stunning 107.4 trillion (around $80.17 billion), up more than nine-times from the same quarter one year ago. If so, that would be a record not only for Samsung, but for any technology company in history. Not even Nvidia Corp. or cloud computing giants like Amazon.com Inc. or Google LLC have generated such massive profits over a single quarter.
Samsung’s expected profit came in above estimates, with analysts forecasting the company to deliver a profit of just 106.1 trillion won, Reuters reported.
If Samsung’s forecast is accurate, it would be the company’s fourth successive quarter of record-breaking operating profit, underlining just how much it has benefited from the ongoing global memory chip shortage that has arisen due to the demands of artificial intelligence. As cloud hyperscalers and enterprises race to build out their AI infrastructure, memory suppliers like Samsung, Micron Technology Inc. and SK hynix Inc. simply cannot keep pace with the level of demand. Memory is in scarce supply, prices have skyrocketed, and Samsung’s shareholders are very happy indeed.
Prices have soared due to tight supply for conventional dynamic random-access memory and NAND flash chips, and there is enormous demand for the newer high-bandwidth memory chips that are purpose-built for AI servers, which require massive amounts of memory for data processing.
Samsung said it anticipates its third-quarter revenue to grow by 127% from a year earlier to 195 trillion won, which would also be a company record. It did not provide a detailed breakdown of its finances, holding these back until it delivers its comprehensive earnings report on October 29. However, most analysts believe that Samsung’s semiconductor business will have accounted for the vast majority of both profit and revenue.
Samsung and other memory chip suppliers expect the good times to continue throughout 2027 and well into 2028. However, Analyst Lee Jae-won of Yuanta Securities told Yonhap there are some potential pitfalls ahead for the company, including the prospect of more tariffs being imposed on foreign semiconductor firms by the U.S., and rising competition in China. “There were some uncertainties surrounding Samsung’s earnings as analysts cut their estimates, but the results turned out to be better than expected,” he said.
Analysts believe that memory chip demand will continue to exceed available supply and say that this imbalance will actually get worse before it becomes better. This could result in further price increases for consumer electronics products. One of the problems is that memory makers like Samsung are devoting more of their production capacity to HBM chips instead of conventional DRAM, because it has higher margins. That’s why Samsung’s DRAM shipments are expected to remain flat compared to last year, while HBM shipments should rise sharply.
Although Samsung is reaping enormous rewards from the memory chip boom, its other businesses have been negatively impacted by the situation, especially its smartphone unit, which has come under mounting pressure due to higher component costs. This has forced Samsung to raise its asking prices for many of its smartphone models and other electronics devices, squeezing the margins of those businesses.