By Heekyong Yang and Hyunjoo Jin
SEOUL, Oct 8 (Reuters) - Samsung Electronics on Thursday projected its quarterly profit would top 100 trillion won, a world first for a technology company, estimating a nearly nine-fold jump in third-quarter earnings as booming demand for AI chips drove strong memory sales.
The world's largest memory chipmaker estimated an operating profit of 107.4 trillion won ($80.17 billion) for the July-September period, slightly ahead of an LSEG SmartEstimate of 106.1 trillion won,
a regulatory filing showed.
The forecast marks Samsung's fourth straight quarter of record operating profit, underscoring a deepening global memory chip shortage as AI infrastructure investment outpaces supply growth, which has driven chip prices up sharply.
Samsung and Micron expected the imbalance to persist into 2028, although rising costs, Chinese competition and potential US semiconductor tariffs pose risks to the longer-term earnings outlook.
"There were uncertainties surrounding Samsung's earnings as analysts cut their estimates, but the results turned out to be better than expected," said Lee Jae-won, an analyst at Yuanta Securities.
Lee said investors would also be closely watching for details of Samsung's shareholder return policy during its earnings call later this month.
Prices have soared due to the tight supply of conventional DRAM and NAND chips as well as growing demand for high-bandwidth memory (HBM), essential for processing vast amounts of data for AI applications.
Third-quarter revenue would likely rise 127% to 195 trillion won from a year earlier, Samsung said.
The company will release detailed results, including a breakdown of earnings by business division, on October 29.
Samsung's shares rose 0.3% in early trade, outperforming a 0.1% fall in the benchmark KOSPI.
AI MEMORY BOOM DRIVES EARNINGS
Memory chips are expected to account for the bulk of the earnings improvement. Analysts expect supply to continue to lag demand, with the imbalance potentially widening in 2027 as AI-related demand absorbs an increasing share of global memory capacity.
Against that backdrop, conventional DRAM bit shipments are expected to remain broadly flat because of limited inventories, while HBM shipments could rise sharply from the previous quarter on strong demand for HBM4, analysts said.
Douglas Kim of Douglas Research Advisory estimated that Samsung's HBM bit shipments expanded by close to 50% quarter-over-quarter in the third quarter.
US rival Micron, a key supplier of high-bandwidth memory to Nvidia, said the chip market could be tighter in 2027 and 2028 than this year, after forecasting quarterly revenue well above estimates on Wednesday.
A stronger South Korean won may offset some of the gains by reducing the value of dollar-denominated overseas sales when converted into local currency.
The memory chip boom also presents a challenge for Samsung's other businesses, particularly its smartphone and consumer electronics divisions, which face mounting pressure from higher component costs.
Higher memory prices, while benefiting Samsung's semiconductor arm, are raising costs for its own smartphones and other electronic devices, squeezing margins in those businesses.
Meanwhile, Samsung's contract chipmaking, or foundry, business is expected to remain loss-making because of the burden of fixed costs and still-low utilisation rates, analysts said.
However, utilisation is expected to improve over the next several quarters, supported by stronger demand for advanced manufacturing processes. Samsung has been seeking to narrow the gap with industry leader TSMC in advanced contract chip manufacturing.
In a potential boost to its foundry ambitions, AMD CEO Lisa Su said on Wednesday that the US chipmaker continues to explore partnership opportunities with Samsung in the memory and foundry businesses.
CHINESE COMPETITION, US TARIFFS CLOUD OUTLOOK
Despite the favourable supply backdrop for Samsung and other memory makers, the longer-term expansion of Chinese memory-chip makers remains a potential challenge.
For now, Chinese memory makers are also expected to remain more dependent on domestic customers, including Chinese AI-chip developers and PC and smartphone manufacturers.
Analysts said, however, US restrictions on China's access to advanced chipmaking equipment continue to limit how quickly Chinese producers can expand.
Another uncertainty is the prospect of US semiconductor tariffs, as Washington pushes chipmakers to expand manufacturing capacity in the United States.
However, analysts said it would take several years for any new US chip manufacturing capacity to boost global memory supply as large-scale chip fabricating plants take years to build and ramp up production.
($1 = 1,339.5700 won)
(Reporting by Heekyong Yang, Joyce Lee and Hyunjoo Jin; Editing by Sonali Paul)
