Samsung Electronics is expecting its strongest quarterly profit on record, as surging demand for artificial intelligence infrastructure drives a sharp increase in memory-chip sales.
The world’s largest memory-chip maker has forecast an operating profit of 107.4 trillion won ($80.17 billion) for the July-September quarter. The estimate is slightly above the 106.1 trillion won consensus forecast from LSEG SmartEstimate and would mark the first time a technology company has reported quarterly operating profit above 100 trillion won.
The forecast represents a nearly nine-fold increase from the same period a year earlier and would give Samsung its fourth consecutive quarter of record operating profit.
AI Demand Drives Memory Chip Boom
The latest earnings outlook highlights the growing impact of AI infrastructure spending on the global semiconductor market. Demand for memory chips used in AI systems has risen sharply as technology companies and data-centre operators continue to invest in computing infrastructure.
The resulting supply shortage has pushed memory-chip prices higher, strengthening margins for major producers including Samsung, SK Hynix and Micron.
Samsung and Micron expect the supply imbalance to continue into 2028, although the outlook is not without risks. Increasing competition from Chinese chipmakers and the possibility of a slowdown in AI investment could weigh on semiconductor earnings over the longer term.
Investors Question How Long the AI Rally Can Last
Despite the record profit forecast, Samsung’s shares showed little reaction, slipping 0.2% in early trading against a 0.5% decline in South Korea’s benchmark KOSPI index.
The company’s stock has fallen more than 25% from its record high in June, reflecting investor concerns over the sustainability of the AI-driven earnings boom.
A stronger South Korean won is also creating pressure because it reduces the value of Samsung’s overseas dollar-denominated sales when converted into local currency.
The market’s focus has shifted to whether the sharp earnings growth that started a year ago would be sustainable, said Kim Seok-hwan, a Market Analyst at Mirae Asset Securities.
Analysts expect Samsung’s fourth-quarter profit to rise by about 8.2% sequentially, significantly slower than the roughly 20% quarter-on-quarter growth expected for the third quarter. The slowdown is partly linked to expectations that memory-chip price growth will moderate.
Memory Prices Show Signs of Cooling
Memory pricing will be closely watched by investors following a year-long rally that pushed profit margins to record levels across the world’s largest memory chip manufacturers.
Market research firm TrendForce expects conventional DRAM contract prices to increase by 10% to 15% in the fourth quarter, compared with the preceding quarter. That would represent a significant slowdown from the approximately 60% increase recorded in the second quarter.
While prices are still expected to rise, the slower pace could put pressure on the exceptional profit growth Samsung and its competitors have enjoyed during the AI-driven semiconductor cycle.
Mobile and Foundry Businesses Remain Under Pressure
Samsung’s strong memory business is offsetting weakness in some of its other operations.
The company’s mobile business is expected to have recorded a loss of more than $1 billion in the third quarter, according to analysts.
Its contract chipmaking or foundry, business is also expected to remain loss-making. High fixed costs and relatively low utilisation rates continue to weigh on the division, although analysts expect utilisation to improve over the coming quarters as demand for advanced manufacturing processes strengthens.
Samsung has been working to close the gap with TSMC, the global leader in advanced contract chip manufacturing.
AI Boom Faces a Sustainability Test
Samsung’s latest forecast underlines the enormous financial impact that AI infrastructure spending is having on the semiconductor industry. However, the company’s outlook also shows why investors are becoming more cautious.
Rising AI chip demand has created a powerful earnings cycle for memory manufacturers, but slower price growth, increasing competition and questions about the pace of future AI investment could determine whether those gains can continue.
Investors will also be watching Samsung’s shareholder-return policy when the company holds its earnings call later this month.
Samsung’s projected $80.17 billion quarterly operating profit demonstrates the extraordinary financial momentum created by the AI chip boom. The bigger question for the semiconductor industry is whether that momentum can be sustained as supply catches up with demand and the AI infrastructure market enters its next phase.
