Samsung Electronics estimates that its operating profit in the third quarter has soared by nearly 9 times. The strong demand from AI enterprises for memory chips continues to cause a supply shortage across the industry.
The world's largest memory chip manufacturer expects its operating profit to reach 107.4 trillion Korean won, equivalent to 80.2 billion US dollars, from July to September, setting a new historical high; last year during the same period, it was 12.2 trillion Korean won, which is also higher than the 106 trillion Korean won forecasted by Reuters Intelligence.
The estimated sales volume is 195 trillion Korean won, a year-on-year increase of 126.6%.
Samsung will disclose preliminary estimates for profits and sales before officially releasing the full quarterly report.
This impressive performance guidance marks the company's fourth consecutive quarter of setting new performance records, and it also highlights the long-term shortage of supply for memory chips: AI Enterprises' large-scale purchases have pushed up chip prices.
The high demand for storage chips also puts pressure on other purchasers of storage chips, such as those for mobile phones and computers, who have to bear the cost increases resulting therefrom.
Market research firm JIC Research expects that the contract price of traditional DRAM used for short-term data storage in devices will rise by 10% to 15% in the fourth quarter.
Analysts expect the chip shortage to continue into next year, and as more long-term supply agreements are signed with AI companies, their profit margins will be supported. American chip manufacturer Micron stated last week that supply in the industry may further tighten over the next two years.
Kim Yong-gon, an analyst in future assets securities, said: "We expect the supply of storage chips next year to be even tighter than this year. The prices of the newly signed long-term contracts are higher than those of the original contracts."
SK Securities analyst Han Dongxi stated that the increase in long-term orders has reduced the cyclical nature of the industry's past sharp fluctuations and decreased price volatility.
In his recent research report, he wrote: 'Even though the peak profit may be slightly lower, the duration of high profits will be significantly extended, maximizing the cumulative cash flow.'
In the field of top-tier AI hardware, Samsung has been continuously narrowing the gap with its competitor SK Hynix in recent years and has made progress in the development of HBM4 advanced chips recently.
However, some investors are skeptical about the long-term demand for chips and are concerned about the fundamental risks associated with artificial intelligence. Some American technology companies have called for a slowdown in the research and development pace of AI.
Investors' concerns are evident: Despite record profits, Samsung's stock price fell by 1.8% on Thursday, representing a cumulative decline of over 25% since its peak in June.
Albert Yong, a capital management partner in Seoul Petra, stated: "Investors no longer just look at quarterly financial reports; instead, they are waiting for clear signals to determine whether this upward cycle can continue next year and the year after that."
They are more concerned about when the industry will reach its peak, and whether the dramatic boom-bust cycles of history will repeat themselves."
Compared to its American counterparts, Samsung has a lower valuation. Its price-earnings ratio is 11.8 times, whereas the Philadelphia Semiconductor Index, which tracks leading American chip companies, has a price-earnings ratio of 39.5 times.
Samsung claims to be the world's first technology company to achieve a quarterly operating profit of over 100 trillion Korean won.
The storage chips used in data centers are the core components of the AI infrastructure. The high demand for these storage chips has brought record-breaking profits and rising stock prices to chip manufacturers such as Samsung. This year, Samsung's stock price has more than doubled, and the company's market value is approximately 1.3 trillion dollars.
Analysts expect that the full financial report will reflect the negative impact of a significant appreciation of the Korean won, as most of Samsung's revenue comes from overseas markets.
In the third quarter, the Korean won appreciated by more than 14% against the US dollar, recording the largest single-quarter increase since early 1998.
The increase in chip prices has also dragged down Samsung's consumer electronics business, making it difficult for the company to pass on the rising costs to end consumers.
Analysts estimate that the combined operating loss of its mobile phone and home appliance business in the third quarter exceeded 1 trillion Korean won.












