The world’s largest manufacturer of memory chips posted a July-September operating profit of $80.5 billion (107.4 trillion won), up by more than 780 per cent year-on-year.
Samsung electronics delivered record quarterly profits given the boom in demand for AI chips, even though its shares fell due to investor concerns about the sustainability of the global tech boom.
The world’s largest manufacturer of memory chips posted a July-September operating profit of $80.5 billion (107.4 trillion won), up by more than 780 per cent year-on-year. This marked the first time that any technology company has posted a quarterly operating profit of more than 100 trillion won.
The global race to build AI data centres used to train chatbots, distillation processes, image generators, etc. has turned the fortunes of companies like Samsung and another South Korean rival SK hynix, despite concerns that the sector may be overvalued.
Samsung shares, however, fell more than five per cent, since the operating profit targets were missed for the semiconductor segment. The company’s memory business achieved “another record-breaking quarter by managing its product mix, with a focus on AI products, amid capacity constraints,” Samsung said in a statement.
Demand-driven shortages of advanced memory chips known as HBM used in AI systems and other data crunching models have caused price hikes. Strong earnings of companies like Samsung and SK hynix are a reminder that the AI memory boom is still very real.
“Chipmakers are benefiting directly from the AI investment boom, while the companies buying their chips are still trying to prove they can earn a decent return on all that spending,” Dilin Wu, research strategist at Pepperstone said.
The company expects unprecedented growth in memory demand in 2027 as well. Samsung also announced on Thursday to return $82.4 billion to shareholders this year, including $22.4 billion in cash dividends. Such returns are expected to allow benefits of earnings growth to translate into shareholder returns.
