Samsung Electronics has projected record operating profit of Won107.4tn ($80.2bn) for the third quarter, driven by surging demand for memory chips from AI companies. Sales are estimated at Won195tn, up 126.6 per cent year-on-year. This marks a fourth consecutive quarter of record performance and highlights a prolonged industry-wide shortage of memory chips, which are critical components in AI data centres. Samsung’s stock has more than doubled this year, valuing the company at about $1.3tn.
High demand has also increased pressure on other buyers, including smartphone and computer makers, who face higher prices. Contract prices for conventional DRAM chips are expected to rise by 10 to 15 per cent in the fourth quarter, according to Trend Force. Analysts expect the chip squeeze to persist into next year, with margins protected by long-term supply contracts with AI companies. US chipmaker Micron warned of a tighter market over the next two years.
Analysts expect Samsung’s full results to reveal a negative impact from the won’s sharp appreciation, as the company earns most of its revenue outside South Korea. The currency gained more than 14 per cent against the dollar in the third quarter. Rising chip costs have also hit Samsung’s consumer electronics business, with analysts estimating combined operating losses of more than Won1tn in smartphones and home appliances.
Source: Financial Times Companies · Summarized by HeadlinesBriefing