Samsung Electronics Q3 Profit Hits Another Record but Falls Slightly Short of Expectations; AI Memory Boom Drives Growth, Yet High Stock Prices and Cyclical Concerns Persist
Preliminary data released by Samsung Electronics on Thursday showed that its operating profit for the third quarter ending in September amounted to approximately KRW 107.4 trillion (about USD 80.1 billions), more than eight times higher than the same period last year, setting a new record mainly driven by demand for high-bandwidth memory (HBM).
According to Jinse Finance, Samsung Electronics announced preliminary data on Thursday showing its operating profit for the third quarter ending September was approximately 107.4 trillion Korean won (about $80.1 billion), more than eight times higher than the same period last year and setting a new record, mainly driven by demand for high-bandwidth memory (HBM). However, this result is still about 1% lower than the analysts' average expectation of 108.7 trillion Korean won. Revenue for the quarter was 195 trillion Korean won, nearly a 127% increase year-over-year, but also below expectations. As a comprehensive Korean enterprise spanning chips and smartphones, Samsung is facing pressure with shrinking profit margins in its consumer electronics segment due to rising component prices.
Neil Shah, Vice President of Counterpoint Research, commented: "These numbers are very robust. Samsung still has many cards to play in HBM next year, as the full effects have yet to be fully realized."
Record-breaking profits and high expectations highlight how the AI boom has tipped the economics of the memory chip industry in favor of Samsung, SK Hynix, and Micron Technology. Data center developers are competing to secure memory chips for AI servers. Counterpoint Research has raised its forecast for DRAM price increase in the third quarter from 5%—10% to 10%—20%, stating that customers are placing orders in advance and suppliers have strengthened their pricing power.
This boom has transformed Samsung’s semiconductor business. A few years ago, the division was incurring losses due to sluggish demand; now, with infrastructure construction for AI absorbing large volumes of advanced DRAM, Samsung is closing the gap with SK Hynix in the HBM field. HBM is a key chip used alongside AI accelerators such as NVIDIA. South Korean trade data also show that semiconductor exports in September more than doubled from the same period last year.
On average, analysts expect Samsung's chip division to achieve an operating profit of 110 trillion Korean won, while the consumer electronics division will record a loss. Headquartered in Suwon, Samsung will release its complete financial report on October 29. Despite the company disclosing record results in July, its share price is still about 25% lower than the June peak, reflecting investor doubts about the chip industry, which is caught in a boom-bust cycle. Samsung and SK Hynix are currently both expanding production capacity and increasing investments in AI sector companies to drive demand for their products.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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