Samsung Electronics reported another strong quarter, with operating profit reaching about $80.5 billion as the global memory shortage continues to fill its coffers.
According to Reuters, the South Korean electronics giant recorded revenue of about $146 billion for the July-to-September quarter, its fourth consecutive period of record results.
Operating profit climbed to approximately €72 billion, up from €8.2 billion a year earlier, nearly ninefold. Its semiconductor division accounted for almost all the profit, generating €71.4 billion as prices for memory used in servers and AI accelerators continued to climb.
The figures show how dramatically the memory industry has changed since manufacturers struggled with excess inventory and weak pricing just a few years ago.
Demand for high-bandwidth memory, or HBM, has become particularly important as AI accelerators require increasingly large quantities of expensive, high-performance DRAM.
Samsung said it has already sold out its HBM production capacity for 2027, leaving customers with limited opportunities to secure additional supplies. The company expects shortages to worsen next year as investment in AI infrastructure continues to grow faster than the industry’s ability to build new manufacturing capacity.
Samsung believes memory markets will remain tight through 2028, although rival SK Hynix has offered an even more aggressive forecast, suggesting shortages could persist until 2030.
Despite the strong financial results, Samsung shares fell up to 6.2 per cent as investors questioned its comparatively cautious forecasts and the lack of a new shareholder-return announcement.
The company has postponed details of its next shareholder-return policy until January, disappointing investors who apparently found $80 billion in quarterly operating profit insufficient. Samsung is responding to the shortage by increasing capital expenditure, with investment spending up 62 per cent to about €51.5 billion this year.
It is pursuing long-term supply agreements with major customers, targeting contracts that cover 60 to 70 per cent of production by 2030.
The foundry business remains loss-making despite signs of improving orders for advanced chips. Samsung expects its Texas manufacturing operation to begin production next year.
Higher semiconductor prices are creating problems elsewhere within Samsung itself, with rising memory costs contributing to a loss in its mobile business. The company is discovering that selling expensive components to everyone else becomes less amusing when its own phone division needs to buy them.
