Samsung Forecasts Record Quarterly Operating Profit of 69 Billion Euros

Image: Illustrative image · Dani4575 · CC BY-SA 4.0 · Source

Samsung Electronics predicts a record quarterly operating profit surpassing 100 trillion won, driven largely by its chip business amid strong AI-related memory demand.

Samsung Electronics anticipates a record-breaking consolidated operating profit of approximately 107.4 trillion South Korean won (around 69 billion euros or 80.2 billion US dollars) for the third quarter, according to preliminary figures. This marks the first time the company expects to exceed 100 trillion won in quarterly operating profit.

The projected operating profit reflects an extraordinary year-over-year increase of 782%, propelled by the robust performance of Samsung's semiconductor division. Revenue is also forecast to reach about 195 trillion won (approximately 126 billion euros), up nearly 127% compared to the previous year.

This would represent Samsung's fourth consecutive quarter of rising operating profits, a growth trend linked to the ongoing shortage in memory chips driven by escalating demand from artificial intelligence (AI) services. AI workloads are contributing significantly to the tighter supply situation for memory components.

Josh Gilbert, a senior analyst for Asia-Pacific at investment platform eToro, told CNBC that AI-related spending is stimulating sustained demand for memory chips amid a constrained supply environment. Gilbert noted that emerging AI applications will require even more memory than traditional chatbots.

Additionally, Gilbert highlighted that memory buyers are entering into multi-year supply agreements, providing Samsung with enhanced demand visibility. This contractual approach mitigates investor concerns about potential downturns in the semiconductor market.

For reference, in the second quarter, Samsung reported revenues of 171.5 trillion won (about 111 billion euros) and an operating profit of 89.5 trillion won (approximately 58 billion euros). The company's strong earnings trajectory underscores its dominant position in the semiconductor industry during a period of heightened AI-driven hardware demand.

(Source: Mobile World Live, CNBC)