Samsung’s Q3 Profits Are Highest Since 2022 As AI Demand Pushes Up Chip Prices 

LSEG SmartEstimate analysts have forecast that Samsung could report an operating profit of 10.1 trillion won ($7.11 billion) for this quarter. 

Samsung Electronics’ third quarter (Q3) profits are expected to be the highest since 2022, as memory chip prices have risen due to server demand, with customers restocking their inventories. LSEG SmartEstimate analysts have forecast that Samsung could report an operating profit of 10.1 trillion won ($7.11 billion) for this quarter. 

This is a 10% rise compared to the same period last year. Analysts have cited competitive chip memory prices, which could even offset reduced sales of high-bandwidth memory (HBM) chips, whose products Samsung has yet to supply to Nvidia. 

These HBM chips are a key component in augmenting AI development and reducing power consumption, enabling the processing of large datasets by vertically stacking these chips. 

Conventional memory chip prices are increasing because hyperscalers and AI-related investments are growing, with the workload on general servers jumping significantly, driving up demand for memory chips. 

Across the industry, in recent years, memory makers have shifted focus towards investing in advanced chips, which may have reduced the production of conventional chips. This, in turn, can lead to a supply shortage and hike up prices for AI server chips. 

DRAM chips recorded an exponential price jump this Q3, compared to a year earlier, with a 171.8% increase. These chips are used in smartphones, computers and servers. 

Despite these positive performance indicators, industry experts have maintained that while Samsung’s conventional memory business boomed, due to the company’s delays in supplying the latest 12-layer HBM3E chips to Nvidia, profit margins and share prices have taken a hit. 

Samsung’s peers, like SK Hynix and Micron, have reported higher gains from AI demand, while Samsung’s growth parameters have deflated, due to the company’s exposure to Chinese markets, where the sale of advanced chips has been restricted by the US.  

The South Korean company has secured two massive deals this year, as it is set to supply chips to ChatGPT-maker OpenAI and Elon Musk’s Tesla. Samsung and its rival SK Hynix inked a deal earlier this month to sell chips to Sam Altman’s AI company, as OpenAI works on building data centres in the country, in a bid to position Seoul as the Asian hub for AI development. 

In July, it was announced that Tesla had signed a $16.5 billion deal to source chips from Samsung. This partnership was hailed as a move to boost the electronics manufacturer’s unprofitable contract business, although questions were raised as to what extent this collaboration could help Musk’s company sell more EVs or produce more robotaxis rapidly. 

Market observers are positive that these deals can help raise Samsung’s share values and bolster its chip business. As news of the deal with Tesla was announced, the phone-maker’s share prices rose more than 43%. 

Samsung stands to profit from the recent OpenAI-AMD deal as well, since AMD is one of the company’s major HBM customers. These deals have only cemented the hope that the world’s largest memory chipmaker will soon be flooded by propositions for new deals and partnerships. 

However, market analysts have signalled caution that, despite the increasing number of AI infrastructure-related supply deals, the industry is prone to risk, particularly from US tariffs, as Washington is determined to gatekeep AI research and development, citing national security issues. 

President Trump’s levies on chips elicited a reaction from Beijing officials, who have promptly been tightening regulations on rare earth exports. Last week, China announced that ahead of the talks between Chinese President Xi Jinping and President Trump, it would be expanding its rare earths export controls, adding five new elements and extra scrutiny for semiconductor users.