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Samsung Reports Record $80bn Profit as AI Chip Demand Soars
Confirmed
In Short: Samsung's profits are being fueled by the AI-driven boom in memory semiconductors, with the company setting an unprecedented record by posting more than 100 trillion won in quarterly operating profit.
Samsung Electronics, a major player in the smartphone market with devices like the Galaxy Fold and S26, is experiencing a surge in profits due to the global demand for semiconductors, particularly those used in artificial intelligence (AI) data centers.
The tech giant expects its operating profit for the quarter ending September to reach 107.4 trillion won ($80 billion), marking its fourth consecutive quarter of record earnings.
South Korea's government has unveiled plans for at least $880 billion in projects led by Samsung and SK Hynix to bolster the country's chip manufacturing capabilities.
Samsung's quarterly operating profit is significantly higher than that of Nvidia, the world's largest company by market capitalization, which reported operating profit equivalent to roughly 85 trillion won in its most recent quarter.
The company's success is also reflected in its stock market valuation, which crossed $1 trillion earlier this year.
The South Korean government plans to establish a new national investment fund from an estimated 50 trillion to 70 trillion won tax windfall generated by Samsung and SK Hynix's AI chip earnings.
Samsung and SK Hynix have committed their own money to a roughly $576 billion domestic AI-chip investment plan, alongside a $258.4 billion southwest semiconductor buildout.
The company's success is also driving up the market capitalization of SK Hynix, which has risen more than 340 percent this year alone, outperforming Samsung's 200 percent jump.
However, workers at Samsung are threatening an 18-day strike later this month, demanding a bigger slice of the AI-driven profits.
Samsung has raised prices on its Galaxy S26 smartphone lineup, citing the persistent memory shortage.
The company's Galaxy S26 Ultra has received mixed reviews, but pre-order numbers have been strong.
Samsung has also unveiled new products like the Galaxy Tab S12 series and Galaxy SmartTag 3 Bluetooth tracking device.
What this adds
The surge in demand for AI chips has resulted in a shortage of semiconductors globally, pushing up sales for firms like Samsung.
Samsung's success is also driving up the market capitalization of SK Hynix, which has risen more than 340 percent this year alone, outperforming Samsung's 200 percent jump.
The company's success is attracting new investment, with chip giant Nvidia and corporate venture capital arms of Microsoft and Qualcomm among its new backers.
What's confirmed
- The AI boom has helped Samsung and other semiconductor giants around the world post record profits Seoul – Samsung Electronics forecast Thursday a more than 780 percent leap in third-quarter operating profit from a year earlier, buoyed by high memory chip prices as AI fuels a global supply shortage.
- Revenue likely rose 127 percent to 195 trillion won, Samsung said.
- In August, Samsung announced a buyback of up to $80 billion of its own stock to boost shareholder returns.
- Samsung averted a strike in South Korea earlier this year by agreeing to a deal to distribute bonuses equivalent to 10.5 percent of operating profit to its semiconductor employees.
- It estimated July-September operating profit at 107.4 trillion won ($80.1 billion), up 782.5 percent on-year, according to a company statement.
- That would mark the first time a South Korean company has surpassed 100 trillion won in quarterly operating profit.
- "The transition to next-generation HBM will open up the opportunity to renegotiate prices" for Samsung, "helping to guarantee solid margins," the Shinhan Securities note said.
- The South Korean giant is the world's largest maker of memory chips -- components now in huge demand as advanced types are snapped up for use in data centres powering artificial intelligence.
- With both numbers hitting all-time highs, the company will have broken its own records for both sales and operating profit for four consecutive quarters.
- It said the shareholder return plan was designed to ensure that the "fruits of the company's growth translate into tangible benefits" for shareholders.
What's still developing
- Samsung, which makes the Galaxy Fold and S26 smartphones, is also expected to get a boost from its latest folding devices that were launched in August.
- Demand is surging while supply struggles to keep up, pushing prices higher and boosting Samsung’s profits.
- The Apple iPhone 18 Pro outmuscles the Samsung Galaxy S26 in raw camera prowess and silicon performance, but Samsung’s entry-level flagship claims the undeniable crown for overall value.
- Samsung, conversely, delivers a remarkably balanced everyday powerhouse at a nearly $300 discount, making it the smarter buy for mainstream consumers.
- Samsung hasn’t announced the change, but we all know its because of the chip shortage thanks to AI.
- Samsung implemented the changes across its S26 portfolio just weeks after Apple introduced a pricier iPhone 18 Pro line and increased the cost of older models such as the iPhone 17 and iPhone Air.
- A new Galaxy S27 Ultra leak now suggests Samsung could build on those tools without raising the headline recording resolution.
- The same source says Samsung has overhauled its image pipeline, particularly for photos, to produce warmer, more natural-looking colors than the comparatively cooler S26 Ultra.
- Nearly 74% of more than 62,000 union members voted in favor of the agreement, driven in part by the fact that workers at rival chipmaker SK Hynix received bonuses more than three times larger than those paid by Samsung last year, according to Samsung's union.
- 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.
- The new iPhone will go head-to-head with Samsung's Galaxy S26 Ultra, which has already launched and established itself as one of the most powerful Android flagships on the market.
- Leaks suggest the new chip could offer an 18 percent improvement in processing performance and up to 30 percent better power efficiency during demanding tasks.