Samsung Q3 Operating Profit Jumps Nearly Ninefold to Record 107.4 Trillion Won as Memory Shortage Deepens

Key Takeaways

• Samsung Electronics estimated third-quarter operating profit of 107.4 trillion won, up 782.5% year over year and above the LSEG SmartEstimate.
• Revenue reached approximately 195 trillion won, rising 126.6% from a year earlier and 13.7% from the previous quarter.
• Tight DRAM and NAND supply, rising memory prices and accelerating HBM4 shipments drove Samsung’s fourth consecutive quarter of record profit.
• Higher component costs weighed on Samsung’s smartphone and consumer-electronics businesses, offsetting part of the semiconductor windfall.
• Samsung will publish its full third-quarter results, including divisional figures, on October 29.

Samsung Electronics delivered another record preliminary result as the global race to build artificial intelligence infrastructure intensified shortages across the memory-chip market.

The South Korean technology group estimated consolidated operating profit of 107.4 trillion won, equivalent to approximately $80 billion, for the July-to-September quarter. That represented a 782.5% increase from 12.17 trillion won a year earlier and marked the first time Samsung’s quarterly operating profit exceeded 100 trillion won.

Revenue was estimated at 195 trillion won, up 126.6% year over year and 13.7% from the second quarter. Operating profit increased 20% sequentially from the previous record of 89.49 trillion won.

The profit figure exceeded the LSEG SmartEstimate of 106.1 trillion won but came in approximately 1% below a separate analyst average of 108.7 trillion won. Samsung’s preliminary guidance does not contain net income, cash flow or business-division results.

Samsung Q3 Preliminary Earnings

The figures represent the midpoint of Samsung’s official guidance ranges. The company expects revenue of between 194 trillion and 196 trillion won and operating profit of between 107.3 trillion and 107.5 trillion won.

The latest result was Samsung’s fourth consecutive quarterly operating-profit record, underlining how sharply the economics of memory production have changed since the AI infrastructure cycle accelerated.

AI Investment Deepens the Memory-Chip Shortage

The surge in AI data-center construction has created exceptional demand for both advanced and conventional memory.

AI accelerators require high-bandwidth memory to transfer large quantities of data between processors. Servers containing those accelerators also need conventional DRAM, enterprise solid-state drives and NAND flash storage.

Cloud providers and AI companies have rushed to secure long-term supplies, while manufacturers have redirected production capacity from consumer memory toward higher-margin server DRAM and HBM.

The transition has tightened the availability of memory used in smartphones, personal computers and traditional servers. Limited inventories have strengthened suppliers’ pricing power, allowing Samsung, SK Hynix and Micron to raise contract prices.

Counterpoint Research increased its third-quarter DRAM price-growth forecast from an earlier range of 5% to 10% to between 10% and 20%. The research firm cited customers placing orders earlier than usual and suppliers gaining greater control over pricing.

TrendForce expects conventional DRAM contract prices to increase by another 10% to 15% during the fourth quarter. Memory producers also expect the supply imbalance to persist through 2027 and potentially into 2028.

New fabrication plants take several years to construct and bring into full production. Meanwhile, AI-related demand is absorbing a growing share of existing capacity, limiting how quickly suppliers can respond.

HBM4 Shipments Help Samsung Close the Gap With SK Hynix

Samsung has historically led the conventional DRAM and NAND markets, but it entered the current AI cycle behind SK Hynix in advanced HBM products.

That gap appears to be narrowing as Samsung expands production of HBM4, the latest generation of high-bandwidth memory designed for AI accelerators such as Nvidia’s Vera Rubin systems.

Douglas Kim of Douglas Research Advisory estimated that Samsung’s HBM bit shipments increased by nearly 50% quarter over quarter during the third quarter. Conventional DRAM shipments were likely little changed because limited inventories prevented Samsung from materially increasing volume.

HBM4 is expected to account for an increasingly large share of Samsung’s memory revenue. Analysts at KB Securities forecast that the product could represent about 80% of the company’s HBM revenue in 2027, compared with roughly 40% in 2026.

The shift matters because advanced HBM products generally carry higher margins than conventional memory. Stronger HBM4 production would allow Samsung to participate more fully in AI accelerator growth while improving its competitive position against SK Hynix and Micron.

Samsung and SK Hynix are also expanding capacity and investing in AI companies and infrastructure projects. Those investments could strengthen relationships with large customers while encouraging additional demand for their memory products.

Semiconductor Profit May Have Exceeded the Group Total

Samsung does not provide divisional figures with its preliminary earnings guidance, but analysts expect the semiconductor business to account for virtually all of the group’s operating profit.

Several brokerage estimates place operating profit from Samsung’s memory operations at approximately 110 trillion won. That would exceed the company’s consolidated figure, implying that losses from smartphones, appliances, foundry manufacturing and other businesses reduced the overall result.

Samsung’s Device Solutions division benefited from:

• Higher DRAM and NAND selling prices;
• Rapid growth in HBM4 shipments;
• Strong enterprise SSD demand;
• Long-term supply agreements with AI companies;
• Improved product mix and production efficiency.

The company’s foundry and system-chip operations are believed to have remained unprofitable. Analysts estimated combined losses of approximately 1 trillion won as low factory utilization and high fixed costs continued to weigh on the businesses.

Foundry utilization could improve over the coming quarters if Samsung wins additional orders for advanced manufacturing processes. AMD CEO Lisa Su recently said the US chipmaker continued to explore opportunities to work with Samsung across both memory and foundry production.

Memory Boom Hurts Samsung’s Smartphone Business

The same price increases benefiting Samsung’s semiconductor operations are creating difficulties for its consumer businesses.

Memory represents a significant portion of the manufacturing cost of smartphones, computers and other electronic devices. Rapidly rising DRAM and NAND prices therefore increase costs for Samsung’s Mobile eXperience and consumer-electronics operations.

Passing the full increase to consumers is difficult, particularly as households remain sensitive to higher prices. Absorbing the increase, however, reduces product margins.

Analyst estimates suggest Samsung’s Device eXperience division, which includes smartphones, televisions and home appliances, recorded an operating loss of between 1.1 trillion and 2.64 trillion won during the quarter.

The weakness illustrates Samsung’s unusual position in the supply chain. It benefits as a memory producer when shortages lift prices, but it also purchases those components internally for its own consumer products.

The imbalance may continue until Samsung can raise device prices, reduce other manufacturing expenses or obtain sufficient internal memory supply at more favorable costs.

Stronger Korean Won Limits the Earnings Upside

Currency movements provided another headwind.

Samsung generates a large proportion of its revenue outside South Korea, with many semiconductor transactions priced in US dollars. When the Korean won appreciates, overseas sales translate into fewer won for financial reporting purposes.

The won strengthened by approximately 14% against the dollar during the third quarter, its largest quarterly increase since early 1998.

Nomura estimates that a 10% appreciation in the won could reduce the profits of Korean chip manufacturers by about 12%. Without the currency move, Samsung’s operating profit may have exceeded the already historic preliminary figure.

Can the Memory Supercycle Continue Into 2027?

The near-term outlook remains favorable because AI infrastructure investment continues to expand faster than memory supply.

Long-term contracts with AI and cloud-computing companies may also make the current cycle less volatile than previous memory booms. These agreements provide better visibility into volumes and prices, reducing chipmakers’ exposure to sudden changes in spot-market demand.

However, several risks could challenge the outlook:

• AI capital spending may slow if customers fail to generate sufficient returns;
• Chinese memory manufacturers could gradually expand their market share;
• US semiconductor tariffs may increase costs or disrupt supply chains;
• Samsung’s consumer businesses may suffer further margin pressure;
• Additional manufacturing capacity could eventually reduce the shortage;
• Rapid HBM development may require continued increases in capital expenditure.

Investors will also examine whether the memory market is approaching peak profitability. Samsung shares have risen sharply during 2026, meaning expectations for continued record earnings are already reflected in part of the valuation.

The company’s full results on October 29 will provide a detailed breakdown of semiconductor, foundry, smartphone and appliance performance. Management is also expected to discuss HBM4 production, memory pricing, 2027 capacity plans and shareholder returns.

Samsung’s preliminary figures confirm that the AI infrastructure boom has created an extraordinary earnings environment for memory manufacturers. The next question is whether constrained supply and HBM demand can sustain those profits as customers, competitors and Samsung’s own device businesses confront the rapidly rising cost of memory.

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