Samsung estimates record Q3 operating profit on AI chip demand; Seoul shares open higher

The South Korean technology giant said in its earnings guidance that operating profit for the July-September period would total 107.4 trillion won. The estimate exceeded the average market forecast by 1.6 percent, according to Yonhap Infomax, the financial data arm of Yonhap News Agency. Third-quarter revenue was reckoned to have risen 126.6 percent from a year earlier to 195 trillion won. Net profit was not included in the guidance.

If confirmed, Samsung will have posted record quarterly revenue and operating profit for the fourth consecutive quarter since the last three months of 2025. It would also be the first time a South Korean company has reported a quarterly operating profit of more than 100 trillion won. The record would be unprecedented even among global technology giants including Apple Inc. and Nvidia Corp. The only comparable case is Saudi Aramco, which posted an operating profit of US$86.5 billion, or roughly 116 trillion won at the time, in the second quarter of 2022 after the outbreak of the Russia-Ukraine war.

Samsung's operating profit margin for the cited quarter is estimated at 55.1 percent, the highest in its history and an extraordinary level for a manufacturing company. Samsung did not provide a detailed breakdown by business division, though its device solutions unit, which includes the semiconductor segment, is believed to have accounted for a dominant share.

The strong performance is widely attributed to continued growth in global investment in AI infrastructure, which has intensified a supply shortage of semiconductors and kept memory chip prices elevated. Industry observers expect favorable market conditions to continue at least through next year. Samsung has been among the biggest beneficiaries of the AI supercycle, backed by the world's largest memory chip production capacity. The company has also expanded sales of higher-value products by becoming the first in the industry to begin mass production and shipments of sixth-generation high bandwidth memory (HBM4) chips. HBM4 is expected to begin making a meaningful contribution to Samsung's earnings next year. Industry observers expect Samsung's operating profit next year to reach around 550 trillion won.

However, non-memory businesses within the chip division, including the system LSI and foundry businesses, are believed to have remained in the red, with combined operating losses estimated at around 1 trillion won. Although those businesses have shown signs of recovery amid improved capacity utilization, industry analysts believe costs associated with the operation of Samsung's fab in Texas weighed on earnings. The device experience division, which oversees Samsung's consumer electronics and mobile businesses, is also estimated to have remained in the red for a second consecutive quarter, as a sharp rise in component prices put pressure on costs. Within that division, the mobile and network businesses are assessed to have posted operating losses of more than 1.5 trillion won, while the visual display and digital appliances businesses may have recorded losses of around 500 billion won. Samsung will release its final earnings report later this month.

In Seoul, Yonhap News Agency reported that shares opened higher Thursday, led by gains in technology stocks despite inflation worries stoked by elevated oil prices. The benchmark Korea Composite Stock Price Index rose 4.78 points, or 0.07 percent, to 6,808.68 at the opening bell. Technology stocks advanced after Samsung's earnings guidance. Overnight, the Dow Jones Industrial Average fell 0.66 percent, while the tech-heavy Nasdaq Composite declined 0.22 percent.

Editor's Summary

Samsung Electronics estimated a record third-quarter operating profit of 107.4 trillion won, up 782.5 percent from a year earlier, on strong AI-related semiconductor demand. The guidance helped Seoul shares open higher even as high oil prices stoked inflation concerns. Samsung's final earnings report, due later this month, will confirm whether the company becomes the first South Korean firm to post quarterly operating profit above 100 trillion won.