Samsung projects $80 billion quarterly operating profit on AI chip demand

Third-quarter earnings guidance

Samsung Electronics projected an operating profit of 107.4 trillion won ($80.17 billion) for the third quarter of 2026, marking its fourth consecutive quarterly earnings high. The guidance released on 8 October represents an increase of nearly nine-fold from the 12.17 trillion won recorded in the third quarter of 2025. Operating profit surpassed the 106.1 trillion won consensus estimate compiled by LSEG SmartEstimate, and exceeds $80 billion for the first time in the company's history. Third-quarter consolidated revenue is projected to climb 127% from a year earlier to 195 trillion won, slightly below the 199.6 trillion won anticipated by analysts in estimates tracked by Handelsblatt. Large South Korean firms typically issue preliminary figures to provide advance guidance to financial markets ahead of finalized accounts. Samsung is scheduled to release its audited earnings report, including divisional breakdowns for semiconductors, mobile devices, and consumer electronics, on 29 October.

Memory market dynamics and AI demand

Earnings growth across the quarter was driven primarily by Samsung's semiconductor division as global spending on artificial intelligence infrastructure accelerated. High-bandwidth memory chips such as HBM4 are essential for processing the large datasets required by AI systems, leading to acute industry-wide shortages. Douglas Kim of Douglas Research Advisory estimated that Samsung's shipments of high-bandwidth memory bits rose by close to 50% from the previous quarter. Shipments of conventional DRAM bits remained broadly flat because limited factory inventories restricted immediate supply expansion. The shortage has also increased prices for conventional DRAM and NAND flash memory chips used in personal computers and mobile phones. According to Samsung, the imbalance between manufacturing capacity and AI-driven memory demand will persist into 2027.

Contract chip manufacturing and rivals

The global scarcity of advanced semiconductor capacity has also benefited Samsung's contract manufacturing operations. With foundry capacity constrained across the sector, Samsung has been able to raise prices for custom chip production. Analysts cited by Handelsblatt project that Samsung's foundry business will reach profitability in 2027, ahead of the company's earlier timetable. In the high-bandwidth memory sector, Samsung competes with South Korean manufacturer SK Hynix and US rival Micron Technology to supply chips for Nvidia hardware. Market valuations for both Samsung and SK Hynix crossed $1 trillion earlier in 2026 before pulling back as investors reassessed technology sector valuations. To secure returns on large capital spending for new chip fabrication lines, Samsung is now pursuing multi-year supply agreements with data centre operators.

Hardware margins and foreign exchange

Despite the semiconductor windfall, higher component prices have created headwinds for Samsung's downstream hardware divisions. Rising memory chip prices have increased manufacturing expenses for the company's mobile and consumer electronics arms, squeezing operating margins on end-user devices. The company launched its latest folding smartphones in August, adding to an established lineup that includes the Galaxy Fold and S26 series. Currency fluctuations also counteracted a portion of the quarter's revenue gains. A stronger South Korean won reduced the local currency value of overseas sales transacted in US dollars, based on an exchange rate of 1,339.57 won per dollar cited in the regulatory filing. Samsung will confirm the precise net impact on mobile margins when divisional results are published at the end of October.