Samsung Electronics forecasted a roughly nine-fold increase in third-quarter profitability as rising demand for AI processors fuelled robust memory sales. The world’s largest memory chipmaker projected an operational profit of 107.4 trillion won ($80.17 billion) for the July-September period, slightly higher than the LSEG SmartEstimate of 106.1 trillion won.
The prediction is Samsung’s fourth consecutive quarter of record operating profit, highlighting a widening worldwide memory chip shortage as AI infrastructure investment outpaces supply growth, driving chip prices considerably higher.
Samsung and Micron estimate the gap to endure until 2028, however Chinese competition and a potential slowdown in AI spending pose concerns to the company’s long-term profitability forecast. Despite reporting another record profit, Samsung shares fell 0.2% in early trading, while the benchmark KOSPI fell 0.5%. Its stock price has fallen more than 25% from a record high in June, raising doubts about the longevity of the AI boom.
Analysts have recently reduced their projections due to the South Korean currency’s fast rise, which lowers the value of dollar-denominated international sales when converted into local currency.”The market’s focus has shifted to whether the sharp earnings growth that began a year ago will be sustainable,” market analyst Kim Seok-hwan of Mirae Asset Securities said. Analysts predict fourth-quarter profit will rise 8.2% from the previous quarter, down from 20% sequential growth in the third quarter, as chip prices fall.
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