South Korean tech giant poised for fourth consecutive quarter of record earnings, though strengthening won and long-term contracts limit margin growth.
Samsung Electronics is forecast to post an nearly nine-fold increase in third-quarter operating profit, driven by sustained global demand for artificial intelligence infrastructure. However, analysts have trimmed consensus forecasts by almost 8 per cent since late August amid moderating memory chip price hikes and currency headwinds.
The world’s largest memory maker is expected to report an operating profit of $79.1 billion (106.1 trillion won) for the July to September quarter, up from $9.1 billion (12.17 trillion won) a year earlier. Based on LSEG SmartEstimate data, this represents Samsung’s fourth consecutive quarter of record operating performance, underscoring a prolonged global memory deficit where AI computing demand continues to outpace supply growth.
Despite tight market conditions expected to extend into next year, the rapid pace of chip price increases slowed during the third quarter. Market intelligence firm TrendForce projects fourth-quarter conventional DRAM contract prices to rise by 10 to 15 per cent sequentially, moderating sharply from a 60 per cent surge in the second quarter.
Analyst Avril Wu, Senior Vice President for Research at TrendForce, highlighted the impact of long-term supply arrangements: “Although the market remains in a tight supply position, the pace of price growth is expected to decelerate… long-term agreements represent an increasingly higher proportion of suppliers’ total output. With ceiling-price mechanisms built in, the rate of price increases has slowed down.” In July, Samsung confirmed plans to lock in long-term contracts for roughly two-thirds of its total memory production to buffer against cyclical market swings.
These pricing ceilings, combined with higher consumer electronics costs and aggressive capacity build-outs by Chinese rivals in lower-end DRAM and NAND segments, have led analysts to project plateauing margins. SK Securities analyst Han Dong-hee estimates Samsung’s memory operating profit margin will remain flat at 76 per cent for the quarter.
Adding to operational pressure, a 14.3 per cent quarterly appreciation of the South Korean won against the US Dollar—its largest gain since 1998—is expected to erode the value of repatriated overseas earnings.
Nevertheless, Samsung continues to gain ground in high-bandwidth memory (HBM) supply for AI data centres, closing the gap on market leader SK Hynix following early delays in qualifying components for Nvidia. According to J.P. Morgan estimates, Samsung’s HBM market share is set to expand to 34 per cent this year, up from 20 per cent last year, as the firm ramps up shipments of its next-generation HBM4 architecture.
