Abstract:
Driven by the AI craze, Samsung Electronics expects single-quarter operating profit to exceed US$80 billion for the first time. The world's largest memory chip manufacturer is expected to continue its momentum of record profits.
Samsung said that in the three months to September, the company's operating profits are expected to surge nearly 9 times year-on-year. times.
This astonishing preliminary performance estimate has a profit scale that is more than twice Samsung’s full-year profit in 2025. Major companies have invested heavily in AI infrastructure and applications, and Samsung has become the main beneficiary of the global wave of high-end chip demand.
Despite the impressive performance, the forecast failed to meet the market's extremely high psychological expectations. Samsung's stock price closed down 2.4% on Thursday at 262,000 won.
Even with the correction, Samsung's stock price has still tripled in the past year; however, the market has recently begun to worry about whether the AI investment boom can be sustained, and investor sentiment has been suppressed.
Most analysts and semiconductor industry executives believe that the supply of memory chips will remain tight in the next few years and chip prices will remain high. Samsung's preliminary results released on Thursday further confirmed the industry's optimistic outlook.
Samsung said that in the third quarter as of September, operating profit surged nearly nine times year-on-year, reaching
107.4 trillion won, equivalent to US$80.18 billion
.This will make Samsung the first South Korean company to exceed 100 trillion won in operating profit in a single quarter, and Samsung said it is also the first major technology company in the world to achieve this milestone.
This forecast value exceeds the previous historical record of approximately 89 trillion won set in the second quarter and is generally in line with market expectations for the third quarter.
Quarterly revenue is also expected to hit a new high, with Samsung expecting revenue to more than double to 1.95 trillion won; analysts' consensus estimate according to FactSet is 206.810 trillion won.
Samsung generally does not disclose the breakdown of each business segment when it releases preliminary results, but most analysts judge that the semiconductor department is the core driving force for this quarter's profit explosion, offsetting the weak performance of non-chip businesses such as home appliances and mobile phones.
The memory chip boom is a double-edged sword for Samsung: rising chip prices are good for the semiconductor business, but rising component costs will squeeze the profit margins of other electronics businesses.
Like many Korean export companies, Samsung's overseas revenue needs to be converted into Korean won, so it will also be exposed to risks caused by exchange rate fluctuations.
Samsung's operating profit could have been higher if the Korean won had not appreciated sharply against the U.S. dollar, analysts at Nomura Securities said. Nomura estimates that for every 10% appreciation of the won, profits of Korean chip companies will fall by 12%. The won has appreciated about 12% against the dollar over the past three months, FactSet data shows.
Samsung has previously stated that it expects the shortage of memory chips to further intensify in 2027 and continue into 2028. KB Securities analyst Kim Jeff’s team said that Samsung’s rapid shift to the production of AI-specific high-end high-bandwidth memory HBM will squeeze the production capacity supply of general-purpose memory chips. Analysts expect Samsung's most advanced HBM4 products to account for about 80% of revenue next year, up from 40% this year.
With profits soaring, investors have begun to pay attention to Samsung's shareholder return policy. Samsung has approved a 30 trillion won dividend for the third quarter and a 15 trillion won stock buyback for employee incentives, and more shareholder return details will be announced later. Samsung estimates that shareholder returns for 2026 will be 90 trillion-110 trillion won.
Samsung will announce its full quarterly earnings later this month.
Comments