Samsung Electronics is all set to record its highest third-quarter profit in three years, thanks to the growing demand for memory chips that power artificial intelligence (AI) and cloud computing technologies. The South Korean tech giant, known as the world’s largest maker of memory chips, smartphones, and display panels, is showing strong signs of recovery after facing a challenging phase in the semiconductor market. Analysts believe that the company’s recent boost in profits is mainly driven by higher memory chip prices and increased orders from data centers that are upgrading their servers to meet the needs of AI systems.
According to reports, Samsung’s operating profit for the months of July to September is expected to reach 10.1 trillion won (about $7.11 billion). This would mark a 10% increase from the same period last year, making it Samsung’s best third-quarter performance since 2022. The prediction comes from an average of estimates provided by 31 analysts, compiled by LSEG SmartEstimate. The results are weighted toward analysts who have shown consistent accuracy in previous forecasts, which gives a fair indication of Samsung’s strong performance this quarter.
This rise in profit comes as the demand for traditional memory chips has grown significantly. These chips are essential for servers that store and process the huge amounts of data used by AI tools such as ChatGPT and other generative AI systems. Many large tech companies and data centers, often called “hyperscalers,” are expanding their server capacities to handle this surge in AI-related tasks. This expansion has led to a higher demand for Samsung’s conventional DRAM and NAND memory chips, which in turn pushed up their prices.
Although Samsung’s newer high-bandwidth memory (HBM) chips are also becoming more important in the AI industry, analysts say that the company’s current profit growth is mainly due to traditional memory chips. HBM chips are a special kind of memory designed to handle large volumes of data faster and more efficiently while using less power. They are particularly useful for training AI models and running complex computing systems. However, Samsung has not yet started supplying its latest HBM products to Nvidia, a key player in AI graphics processing units (GPUs). This has slightly slowed down Samsung’s HBM sales, but the strong performance of other memory products has more than made up for it.
Experts say that the AI revolution is creating a ripple effect throughout the semiconductor industry. As AI tools become more popular, companies are investing heavily in upgrading their data centers. This requires not only more powerful chips but also more storage capacity to handle the rising flow of digital information. Samsung, being a leader in the chip market, is one of the main beneficiaries of this shift. The increase in demand for its memory products is helping the company recover from a tough period when chip prices had fallen due to an oversupply and weak global electronics demand.
During the past year, the semiconductor industry faced a major slump as the demand for smartphones and computers dropped after the COVID-19 pandemic boom. Companies were left with excess chip inventories, and prices plunged. Samsung, like many others, suffered significant losses during that period. But the AI wave has completely changed the picture. Now, data centers and tech firms are racing to buy chips to power AI systems, leading to a rebound in chip prices. This new demand cycle has lifted not only Samsung but also other chipmakers around the world.
However, analysts also warn that there are still risks ahead. Some challenges include China’s restrictions on the export of rare earth materials, which are crucial for chip production. Additionally, global trade tensions and potential tariff increases between major economies could impact supply chains and raise production costs. These geopolitical uncertainties make the chip market unpredictable, even as demand remains strong. Still, experts believe that Samsung’s strong market position and advanced technology will help it navigate these challenges effectively.
Analysts point out that the balance between conventional and advanced memory chips will play a key role in Samsung’s future performance. While HBM chips are becoming the core of AI processing, the company’s vast production capacity for standard DRAM chips continues to provide a stable source of income. Many customers, especially large data centers, are still relying heavily on these traditional chips for their everyday operations. As AI becomes more deeply integrated into cloud services, smartphones, and other devices, both types of chips are expected to complement each other in driving Samsung’s growth.
Industry experts also note that Samsung’s decision to rebuild its chip inventories earlier this year is paying off. The company reduced production in 2023 to control oversupply, but it has since restarted production at a steady pace to meet new demand. Now, as prices rise again, Samsung is in a favorable position to deliver large quantities without facing shortages. This smart inventory management strategy has helped the company take advantage of the market rebound more efficiently than some of its competitors.
The global interest in AI technologies has also encouraged investors to focus on semiconductor stocks. Samsung, being one of the key suppliers to major tech firms, is seen as a reliable indicator of the industry’s health. The company’s third-quarter performance could boost confidence across the sector, signaling that the chip downturn is officially over. If the AI trend continues as expected, Samsung may even surpass its previous profit records in the coming quarters.
Despite the optimistic outlook, analysts are still watching closely to see how quickly Samsung can start mass-producing its latest HBM chips for AI partners like Nvidia. This collaboration is expected to become a major revenue stream once production begins. Until then, Samsung’s profits will continue to rely mainly on its traditional memory business and the steady recovery of the global electronics market.
The company is scheduled to release its preliminary third-quarter results on October 14, which will confirm whether it has achieved the expected profit milestone. Investors and industry observers will be paying close attention to the numbers, as they could provide valuable insight into how strong the current AI-driven chip recovery really is.
In short, Samsung’s comeback story shows how quickly technology trends can reshape an entire industry. From struggling with oversupply and falling prices just a year ago, the company is now at the center of a booming market powered by AI innovation. With its expertise in both traditional and high-performance memory chips, Samsung is well-positioned to lead the next chapter of the digital age — one where artificial intelligence continues to push the boundaries of what technology can achieve.Microsoft and SoftBank Discuss $2 Billion Investment in Wayve, Report Says
