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Samsung Forecasts Record Profit as AI Chip Demand Surges
Samsung expects to make more operating profit in this quarter than ever before.
It says the forecast is helped by strong demand for memory chips used in artificial intelligence systems.
These chips are in short supply, which has pushed prices higher.
Samsung expects revenue to rise sharply too.
But not every part of the company is doing well: expensive chips are hurting its smartphone business, and its chipmaking service is expected to lose money.
Samsung is also trying to catch up with TSMC in advanced chip manufacturing.
Samsung and Micron expect the shortage of memory chips to continue into 2028.
Still, analysts think Samsung’s profit growth may slow in the next quarter.
Samsung Electronics forecasts third-quarter operating profit of 107.4 trillion won, which would be a record.
The company expects revenue to rise 127% year on year to 195 trillion won.
Strong demand for DRAM, NAND and high-bandwidth memory is lifting chip prices and earnings.
Higher memory prices are pressuring Samsung’s smartphone business, while its foundry operation is expected to remain loss-making.
Samsung and Micron expect the memory supply imbalance to last into 2028, though analysts anticipate slower profit growth in the fourth quarter.
- Who
- Samsung Electronics
- What
- It forecast record third-quarter operating profit of 107.4 trillion won.
- Where
- Samsung Electronics is a South Korean technology company.
- When
- The forecast is for the third quarter; the article does not specify a year.
- Why
- Demand for memory chips used in AI systems has surged, raising chip prices.
Reasons for optimism
Risks and pressures
How long the AI-driven chip boom can last
Reasons for optimism
Samsung and Micron expect the global memory supply imbalance to continue into 2028, supporting demand and prices.
Risks and pressures
Analysts expect slower profit growth in the fourth quarter, and TrendForce forecasts a smaller rise in conventional DRAM prices than in the second quarter.
Samsung’s broader business performance
Reasons for optimism
Analysts expect foundry utilisation to improve over coming quarters as demand for advanced manufacturing increases.
Risks and pressures
Higher memory component prices are pressuring Samsung’s smartphone business, and its foundry operation is expected to remain loss-making.
Key facts
- Forecast operating profit
- 107.4 trillion won ($80.2 billion)
- Forecast revenue
- 195 trillion won, up 127% year on year
- LSEG SmartEstimate operating profit forecast
- 106.1 trillion won
- Estimated mobile division loss
- More than $1 billion in the third quarter
- Expected memory supply imbalance
- Samsung and Micron expect it to continue into 2028
- TrendForce Q4 conventional DRAM contract price forecast
- A rise of 10% to 15%, compared with about 60% in the second quarter
Sources
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