A Samsung Electronics Co. 12-layer HBM3E memory chip.
(Bloomberg) — Samsung Electronics Co. posted its biggest quarterly profit in more than three years, reflecting booming memory chip demand while AI development accelerates globally.
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South Korea’s largest company reported an operating profit of 12.1 trillion won ($8.5 billion) in the September quarter, compared with analysts’ projection for 9.70 trillion won, according to a preliminary earnings report released on Tuesday. Revenue climbed to 86 trillion won. The company will provide a full financial statement with net income and divisional breakdowns later this month.
The results may bolster confidence among investors betting on the durability of demand for AI servers and memory chips. Samsung’s shares have surged more than 60% since early June, buoyed by signs of recovery in its pivotal semiconductor division, which typically accounts for 50% to 70% of the company’s annual profits.
Samsung is seeking to position itself to ride the anticipated AI boom in coming years. It’s made progress with its latest high-bandwidth memory chips, securing an order from Advanced Micro Devices Inc. while awaiting final approval on HBM3E chips from Nvidia Corp.
Investors are betting that Samsung can catch up with smaller rival SK Hynix Inc. in the supply of HBM to Nvidia and others for AI applications.
What Bloomberg Intelligence Says
Its 3Q DRAM profit may have increased sequentially due to both conventional DRAM and high bandwidth memory (HBM) chips. Profit from NAND chips might have also notched higher on AI demand, and the chip division’s 3Q profit should be spared the one-time costs it incurred in 2Q. The display segment’s profit may have risen sequentially on premium smartphone customers. Mobile division profit might have also grown due to new and popular foldable phones.
– Masahiro Wakasugi, analyst
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This month, both Korean industry linchpins struck agreements to supply chips to OpenAI’s Stargate project. Their projection for demand represented more than twice the current global capacity of HBM, underscoring Stargate’s enormity and quickening global AI development.
That, together with rising memory chip prices, has prompted dozens of analysts to lift their price targets for Samsung recently.
