Samsung Electronics Co. reported a much stronger-than-expected third-quarter profit, which is also its biggest in three years, driven by a rebound in memory chip prices and booming demand for high-end semiconductors powering artificial intelligence servers.
The world’s memory chip giant said in a regulatory filing Tuesday that its preliminary operating profit surged to 12.1 trillion won ($8.5 billion) for the July–September period, up 31.8% from a year ago and more than doubling from the previous quarter.
The figure beat market expectations, which analysts had recently revised to around 10 trillion won from the previous mid–8 trillion won range.
The result also marks Samsung’s highest quarterly operating profit since the second quarter of 2022, underscoring the strong recovery in the global chip market after a prolonged slump.
It was also the first time since last year’s second quarter that the company’s profit exceeded 10 trillion won.
Revenue rose 8.7% on-year and 15.3% on-quarter to 86 trillion won, surpassing analysts’ estimates and setting an all-time quarterly record.
It was the first time Samsung’s sales have topped the 80 trillion won threshold.
The upbeat results mark a sharp turnaround for the South Korean tech giant, which had grappled with a memory chip downturn while lagging behind its cross-town rival SK Hynix Inc. in a race to supply high-bandwidth memory (HBM) chips for AI applications.
But in June, it secured an order from a major AI chip maker, Advanced Micro Devices Inc. (AMD), to supply its 288GB HBM3E chips for AMD’s newest MI350 Series accelerators.
It is also said to have won long-awaited validation from Nvidia Corp. for its latest fifth-generation HBM, the 12-layer HBM3E product, clearing a critical hurdle in the race to supply chips powering the next wave of AI hardware.
While Samsung Electronics did not disclose divisional results, analysts estimate that its Device Solutions (DS) unit, which oversees the company’s semiconductor business, earned over 5 trillion won in operating profit in the quarter, more than 10 times the previous quarter’s level.
A jump in sales of HBM chips and solid-state drives for AI applications, coupled with strong demand for its latest premium foldable smartphone series, the Galaxy Z Fold7 and Z Flip7, has lifted profits, they said.
Samsung will announce detailed results on Oct. 30.
Its shares traded 2.5% higher at 95,600 won in Seoul trading on Tuesday morning.
By Sookyung Seo
skseo@hankyung.com
Jennifer Nicholson-Breen edited this article.
