Home · World · Oct 7 archive
Samsung Reports $80bn Profit as AI Chip Demand Surges
Confirmed
In Short: Samsung Electronics announced Thursday that its third-quarter operating profit surged to a record 107.4 trillion won ($80 billion), making it the first technology company to cross the 100 trillion won mark in quarterly operating profit.
Samsung Electronics announced Thursday that its third-quarter operating profit surged to a record 107.4 trillion won ($80 billion), making it the first technology company to cross the 100 trillion won mark in quarterly operating profit.
The tech giant's revenue also hit a record 195 trillion won, up 126.6 percent year-over-year, according to preliminary earnings guidance.
Samsung's success is largely attributed to the booming demand for AI chips, which has resulted in a global semiconductor shortage, pushing up sales for firms like Samsung.
In June, South Korea unveiled plans for at least $880 billion in projects led by Samsung and SK Hynix to build out the country's chip manufacturing capabilities in the coming years.
The surge in demand for semiconductors has also pushed up Samsung's stock market valuation, which crossed $1 trillion earlier this year.
Samsung's operating margin reached approximately 55.1%, up 2.9 percentage points from the previous quarter and the highest on record.
Despite these record profits, Samsung is facing challenges in the smartphone market, with mounting losses and no immediate relief in sight.
Samsung's Galaxy Fold and S26 smartphones, launched in August, are expected to contribute to the company's success.
The company has also announced job cuts in its consumer electronics area, as its chip division experiences surging profit.
US diesel prices have surged, hitting a record of $6.53 per gallon last week, driven by the ongoing war in Iran and the resulting congestion of key trade routes.
Apple's upcoming iPhone 18 lineup, expected to be unveiled in September 2026, could become one of the first major consumer products to reflect what analysts call 'AI inflation,' as surging demand for artificial intelligence infrastructure drives up the cost of key smartphone components.
Diesel and related fuels make up roughly 28 per cent of the world’s oil demand, and have been in especially short supply due to military strikes on energy infrastructure in the Middle East and Russia, reducing the world’s capacity to turn oil into the fuels that consumers use.
What this adds
The surge in AI chip demand has also led to a shortage of conventional DRAM, with Samsung's HBM revenue share estimated at around 30%, compared to SK Hynix's over 50%.
Background
Despite record profits, Samsung faces challenges in the smartphone market, with mounting losses and no immediate relief in sight.
What's confirmed
- Affected by the impact of the US-Iran war on the global oil and gas industry, the price of diesel in the United States broke through the record high in 2022 on Friday, and the average price in the United States soared to $5.85 per gallon for the first time.
- As the "economic blood" that supports demand for freight, agriculture, and heating, diesel is deeply bound to the US economy, directly driving up the prices of various commodities, which in turn will affect the path of interest rate decision-making by the Federal Reserve.
What's still developing
- South Korea commits $576bn to AI chips and data centres in bid for global dominance The great displacement: How AI’s workforce cull is fuelling the infrastructure boom TSMC’s $1.5tn chip forecast signals decade of pressure on AI data centre networks ITW Asia brings together the whole connectivity and digital infrastructure industry to get business done.
- The margin gap between the two stems mainly from product mix: HBM accounts for over 50% of SK Hynix's total memory revenue, whereas Samsung remains dependent on conventional DRAM; according to estimates from Daishin Securities, Samsung's HBM revenue share is around 30%.
- Sinopec Sees China Oil Demand Falling 8.9% in 2026 The leading economics blog online covering financial issues, geopolitics and trading.
- The California Independent System Operator forecasts that peak power demand will hit 47,379 megawatts Wednesday, below the September 2022 record of 52,061 megawatts.
- Companies including Microsoft, Amazon, Google and Meta are investing hundreds of billions of dollars into AI-focused data centers, creating unprecedented demand for specialized memory products.
- Meanwhile, an exclusive Reuters report said Samsung Electronics plans to invest 39 trillion dong ($1.5 billion) to build its first semiconductor testing plant in Vietnam.
- READ MORE: Spain calls on Brussels to tax private jets and fossil fuel profits to fund Europe-wide wildfire response The primary driver of the increase is rising energy costs, with the ongoing war in Iran and the resulting congestion of key trade routes including the Strait of Hormuz pushing up the price of fuel, including petrol and diesel.
- The figure is also the highest year-on-year level recorded in Spain since February 2023.
- EU leaders are mulling over proposals to respond to Trump’s diesel demand.
- Notably, fuel supplies in the Middle East and Russia have been disrupted recently; this is compounded by a seasonal rise in demand driven by the autumn harvest.
- The reason is that supply is tight and demand is rigid, and diesel is deeply bound to the global trading system.
- The increases are attributed to soaring memory costs driven by AI demand, though upcoming sales could bring the phones back down in price.