Samsung forecasts record $80bn Q3 profit on AI chip demand

Samsung Electronics projected an operating profit of 107.4 trillion won (about $80.17 billion) for the July‑September quarter, topping the LSEG SmartEstimate of 106.1 trillion won and marking the fourth consecutive record quarter for the company. The forecast, announced on Thursday, reflects a near nine‑fold jump in earnings as AI‑driven memory chip demand fuels the surge, making Samsung the first technology firm to target more than 100 trillion won in quarterly profit.

The surge stems from a deepening global shortage of conventional DRAM and NAND chips, compounded by soaring demand for high‑bandwidth memory (HBM) needed for AI workloads. Samsung and Micron expect this supply‑demand imbalance to persist through 2028, although Chinese competition and a possible slowdown in AI spending pose longer‑term risks. Market analyst Kim Seok‑hwan of Mirae Asset Securities noted that attention has shifted to whether the rapid earnings growth that began a year ago is sustainable.

Despite the optimistic outlook, Samsung shares slipped 0.2% in early trade while the KOSPI fell 0.5%, and the stock has dropped more than 25% from its June peak amid concerns over the durability of the AI boom. Analysts also trimmed forecasts after the South Korean won appreciated sharply, reducing the value of dollar‑denominated overseas sales. TrendForce expects conventional DRAM contract prices to rise 10‑15% in Q4, a slowdown from the roughly 60% surge seen in Q2, and predicts Q4 profit to grow 8.2% sequentially, down from a 20% rise in Q3.

Samsung said third‑quarter revenue could climb 127% to 195 trillion won year‑on‑year, driven largely by memory sales. Douglas Kim of Douglas Research Advisory estimated Samsung’s HBM shipments expanded by close to 50% quarter‑over‑quarter. However, the memory boom pressures other divisions: the mobile business posted a loss exceeding $1 billion, and the contract chipmaking (foundry) unit remains loss‑making, though utilisation is expected to improve in coming quarters as demand for advanced processes strengthens. Samsung will release a detailed earnings breakdown, including division‑level results, on October 29, and investors will watch for details on the company’s shareholder‑return policy.

What to watch: Q4 memory price trajectory and Samsung’s shareholder‑return plan.

Editor's note: The article uses the provided full text well, balancing the record earnings forecast against the challenges in the mobile and foundry divisions.