Samsung Electronics is expected to report a nearly nine-fold increase in third-quarter operating profit, supported by strong demand for AI processors. However, gradually rising memory chip prices and a stronger South Korean won are raising concerns about sustaining its record margins.
The world’s largest memory-chip maker is expected to post an operating profit of 106.1 trillion won (USD 79.1 billion) for the July-September quarter, according to the LSEG SmartEstimate based on forecasts from 21 analysts.
The estimate is up sharply from 12.17 trillion won during the previous year and would mark Samsung’s fourth consecutive quarter of record operating profit. However, analysts have cut the forecast by 7.7% since late August.
The strong earnings outlook reflects a prolonged global memory chip shortage, as demand for AI infrastructure continues to outpace supply growth. Chipmakers expect the shortage, which began more than a year ago, to continue into 2027 and potentially through 2028.
The pace of the hike in memory chip prices has slowed in the third quarter despite strong demand. Investors are concerned that chip margins may have peaked and are questioning whether the AI spending boom can sustain current profit levels.
Samsung’s memory-chip operating profit margin is expected to remain at 76% in the third quarter, unchanged from the previous quarter, according to SK Securities analyst Han Dong-hee.
TrendForce expects conventional DRAM contract prices to rise 10% to 15% in the fourth quarter. This is much slower than the 60% rise recorded in the second quarter. Long-term supply agreements are also limiting price increases in exchange for guaranteed supply.
Also Read: NVIDIA Raises AI Chip Prices, Forcing Silicon Valley to Rethink AI Strategy
The South Korean won strengthened 14.3% against the US dollar during the third quarter, marking its biggest quarterly gain since early 1998. The stronger currency reduces the value of Samsung’s overseas earnings when converted into won.
Samsung also faces increasing competition from Chinese memory chipmakers, particularly in lower-end products.
Meanwhile, Samsung is expected to increase sales of high-bandwidth memory (HBM) chips used in AI data centers. Its HBM market share is projected to rise to 34% this year from 20% last year, while SK Hynix’s share is forecast to decline to 46% from 60%.
Samsung is expected to release preliminary third-quarter results on Thursday, with detailed results due later in October.