Samsung releases preliminary results: Q3 operating profit breaks 100 trillion won for the first time, soaring nearly ninefold year-on-year

Samsung Electronics' third quarter operating profit reached a historic high, as the AI infrastructure investment boom fueled a sustained surge in demand for memory chips, earning the world’s largest memory chip manufacturer substantial returns.

On Thursday, Samsung released its preliminary performance guidance, announcing that consolidated operating profit for the third quarter of 2026 (July to September) will be approximately 107.4 trillion won (about $80.1 billion), a nearly ninefold increase from 12.17 trillion won in the same period last year, marking the first time in company history that quarterly operating profit surpassed 100 trillion won.

This figure exceeded the LSEG consensus estimate of 106.1 trillion won but was slightly below the Bloomberg analysts’ average forecast of 108.7 trillion won. Third quarter revenue was about 195 trillion won, a year-on-year increase of 127%, though still below market expectations.

This marks the fourth consecutive quarter that Samsung has set a new operating profit record. The driving force behind this performance is concentrated in the memory chip business, where tight supply in traditional DRAM and NAND chips, combined with robust high bandwidth memory (HBM) demand, pushed prices higher and led to a significant expansion in chip division profitability.

Analysts expect the supply-demand imbalance to persist through 2027, by which time AI-related demand will absorb an increasingly large share of global memory production capacity. Samsung will release a full financial report with a breakdown by business segment on the 29th of this month.

The acceleration of AI data center construction is the core driver of this memory supercycle. Data center developers are competing to secure memory chips needed for AI servers, resulting in sustained supply-side pressure.

The supply of traditional DRAM and NAND chips remains limited, while the continually expanding demand for high bandwidth memory (HBM) for large-scale AI data processing is driving overall memory prices sharply higher.

Research firm Counterpoint Research has raised its forecast for third quarter DRAM price increases from the previous quarter-on-quarter 5% to 10% to a new range of 10% to 20%, citing widespread early ordering by customers and a marked strengthening in suppliers’ pricing power.

Analysts generally expect supply growth to continue lagging behind demand, with this gap potentially expanding further by 2027, at which point AI-related demand will absorb an increasing share of global memory manufacturing capacity.

In the HBM segment, a core supporting chip for AI accelerators, Samsung is gradually narrowing the gap with competitor SK Hynix.

According to analysts, traditional DRAM shipment volumes are expected to remain roughly flat quarter-on-quarter due to inventory constraints; however, driven by strong HBM4 demand, HBM shipments are likely to grow substantially compared to the previous quarter.

Douglas Kim of Douglas Research Advisory estimates that Samsung’s HBM shipment volume in the third quarter increased by nearly 50% quarter-on-quarter. Meanwhile, both Samsung and SK Hynix are adopting a two-pronged approach: expanding production capacity and increasing strategic investments in AI companies, aiming to further drive demand for their products.

However, the appreciation of the Korean won has created some drag. When overseas US dollar-denominated sales are converted to the local currency, actual revenue shrinks, partially offsetting the gains from increased shipment volumes.

Analysts estimate that Samsung’s chip division could achieve quarterly operating profit of 110 trillion won, making it the main pillar supporting overall performance; meanwhile, its consumer electronics division is expected to post losses.

While rising memory chip prices are boosting semiconductor business profits, they are also increasing the component costs for Samsung smartphones and other consumer electronics, putting pressure on profit margins in related departments.