Samsung Electronics reported a third-quarter operating profit of 107.4 trillion won ($80 billion), marking the first time a technology company has exceeded the 100 trillion won quarterly threshold. The surge, a 782.5% year-over-year increase, positions Samsung alongside Saudi Aramco as one of only two companies globally to hit this milestone, surpassing even Nvidia’s recent $63.7 billion profit for its fiscal second quarter ended in July.
Revenue also hit a record 195 trillion won, up 126.6% annually, according to preliminary earnings guidance. Yet shares fell 1.77% to 263,750 won as of 1:30 p.m., as the Kospi slipped toward 6,700 amid rising US Treasury yields and selling by foreign and institutional investors.
The profit surge stems from strong demand for memory chips, particularly high-bandwidth memory (HBM) used in AI applications. Analysts estimate Samsung’s memory division alone generated about 110 trillion won in operating profit, more than offsetting losses in other segments. Smartphone operations, for instance, are projected to have lost about 1.5 trillion won, a deeper decline than the 700 billion won loss in the second quarter. TVs and home appliances are also projected to have posted combined losses of 700 billion to 800 billion won.
The memory boom carries risks. While higher chip prices boosted semiconductor profits, they also squeezed margins in smartphone, TV, and appliance production. A stronger won also weighed on earnings by reducing the value of dollar-denominated chip sales when converted into Korean currency. Some forecasts had put quarterly operating profit above 120 trillion won before the won’s appreciation prompted analysts to lower their estimates.
Samsung Display is estimated to have contributed around 1 trillion won in operating profit, while audio and automotive electronics subsidiary Harman likely added about 400 billion won. The memory-driven growth is expected to continue into next year. Tight HBM supply continues to support prices, while chipmakers’ push to allocate more capacity to HBM is constraining conventional DRAM supply.
Meritz Securities recently raised its forecast for Samsung’s 2027 operating profit to 632 trillion won from 562 trillion won, reflecting sustained demand for AI-related memory. To meet this demand, Samsung is expanding HBM production lines in Pyeongtaek while pursuing longer-term production sites in Yongin and Gwangju. It is also expanding advanced foundry capacity in Texas to strengthen its contract chipmaking business.
Record semiconductor earnings are also translating into bigger employee rewards. Samsung has finalized a special bonus plan for its chip division, funded by 10.5% of the unit’s previous-year operating profit, with no cap. The bonuses, paid entirely in Samsung shares between late March and early April next year, subject to shareholder approval, will allocate 40% to the semiconductor workforce and 60% based on individual business units’ performance.
Leave a Reply