Samsung Electronics forecast a record 107.4tn-won quarterly operating profit as AI demand drives a surge in memory-chip demand.
The forecast extends Samsung's run of record earnings but comes as investors expect extraordinary growth from companies supplying the AI boom. The eventual business breakdown will show how much came from memory chips, smartphones and other operations.
Samsung expects revenue of about 195 trillion won, nearly 127% more than in the same period last year. Operating profit is projected to rise 782% from a year earlier.
Samsung's projected profit versus the previous quarter
Third quarter
Forecast
107.4 trillion won
- Revenue: about 195 trillion won
Second quarter
Record
89.5 trillion won
- Revenue: 171.5 trillion won
Google, Amazon, Meta and other US tech giants committed more than $650bn this year to artificial intelligence projects. In South Korea, Samsung and SK Hynix are leading plans for at least $880bn in projects to expand the country's chip manufacturing capabilities in the coming years.
Along with local rival SK Hynix and US-based Micron, Samsung ranks among the world's biggest memory chip makers. Their chips are essential to AI companies such as Nvidia.
Samsung said in September that it had formed a strategic partnership with French artificial intelligence startup Mistral AI and would deploy the startup's AI models throughout its semiconductor operations. Its latest folding devices, launched in August, are also expected to provide a boost.
A chip shortage driven by surging demand has led firms including Samsung to raise prices, making products such as smartphones and computers more expensive.
AI expectations are raising the bar
Samsung has delivered a record profit and still fallen short of expectations, which tells you just how demanding the AI trade has become
Josh Gilbert, lead analyst for APAC at eToro, said that AI spending was increasing demand for memory as supplies stayed tight. AI agents could use much more memory than a chatbot that responds to one question.
Memory buyers are also committing to multiyear supply agreements, giving Samsung greater visibility over demand in a business where investors have always worried about the next downturn
Samsung shares dropped 0.7% Thursday morning. The sources do not explain why the shares fell.
The final third-quarter operating profit and the contribution from each business division are not yet known.
Samsung's full third-quarter earnings, including a business-division breakdown, are due at the end of October.
