The South Korean manufacturer attributes a sharp projected rise in quarterly profit to strong memory demand, although higher costs are squeezing its consumer electronics businesses.
Samsung Electronics has issued preliminary third quarter earnings guidance pointing to a steep rise in operating profit, driven by demand for memory components used in artificial intelligence infrastructure.
Figures cited in the supplied market report put projected operating profit at 107.4 trillion South Korean won, equivalent to approximately $80.2 billion, against 12.2 trillion won a year earlier. Estimated sales were put at 195 trillion won. These unusually large preliminary figures require confirmation against Samsung’s original regulatory filing before publication.
The reported surge reflects a market in which operators of artificial intelligence data centers are competing for high performance memory and long term supply. Rising prices have benefited chipmakers but increased production costs for manufacturers of smartphones, computers and other consumer devices.
Market research firm TrendForce expects contract prices for conventional dynamic random access memory to rise by between 10 and 15 per cent in the fourth quarter, according to the report. Samsung has also been developing its next generation HBM4 memory products to strengthen its position against competitors in advanced AI hardware.
Investors nevertheless remain concerned that the current cycle may not sustain its pace. The report said Samsung shares declined 2.4 per cent following the guidance and remained below their June peak, despite a strong advance earlier in the year.
Currency movements could add pressure. The South Korean won reportedly appreciated by more than 14 per cent against the dollar during the quarter, potentially reducing the value of overseas earnings when converted into local currency.
Higher memory input costs are also affecting Samsung’s handset and household appliance operations. Analysts cited in the report estimated that those businesses together recorded operating losses during the quarter. Full results will be needed to establish the actual performance of each division.
