Samsung Posts 107 Trillion Won Profit Driven by AI Memory Demand

Samsung Electronics reported a third-quarter operating profit of 107.4 trillion won ($80.17 billion), which is a nearly nine-fold increase from the previous year. This performance marks the first time a technology company has surpassed 100 trillion won in quarterly profit. The growth was driven by demand for high-bandwidth memory chips used in artificial intelligence infrastructure.

Although these figures are records, the results fell slightly below some market expectations. This outcome highlights the high standards set for companies participating in the current AI investment cycle.

"Samsung has delivered a record profit and still fallen short of expectations, which tells you just how demanding the AI trade has become," said Josh Gilbert, lead analyst for APAC at eToro.

Sustainability of the AI Memory Boom

While the semiconductor division fueled this growth, analysts are questioning how long the momentum can persist. The rapid expansion of AI-related revenue over the past year has raised concerns regarding market saturation and a potential cooling cycle in memory prices.

"The market’s focus has shifted to whether the sharp earnings growth that started a year ago would be sustainable," said Kim Seok-hwan, market analyst at Mirae Asset Securities.

Data from market research firm TrendForce suggests that the cooling may have begun. According to a recent report, conventional DRAM contract price growth is expected to moderate to between 10% and 15% in the fourth quarter. This is a deceleration from the 60% surge observed in the second quarter of this year.

Challenges in the Mobile Division

While the chip business performed well, other segments of the conglomerate faced difficulties. Samsung's mobile business reported a loss exceeding $1 billion for the third quarter. This underperformance was attributed to rising component costs, which pressured margins despite company efforts to maintain smartphone market share.

Market Context

The divergence between the semiconductor boom and the mobile division’s losses underscores the challenges Samsung faces in balancing its portfolio. As the company navigates the transition toward AI-centric hardware, its ability to maintain profitability depends on its capacity to manage rising production costs while navigating a conservative pricing environment for standard memory products.