Samsung Stocks: Chip Company Shatters Expectations with 80% Profit Jump – Blockonomi

TLDR

• Samsung’s chip unit posted operating profit of 7 trillion won in the third quarter, an 80% increase that exceeded analyst expectations by 50%
• Memory chip revenue reached record highs based on HBM3E sales as demand for AI infrastructure accelerates
• The company invests $33 billion in capital expenditures by 2025 and prepares HBM4 production
• Total operating profit was $8.5 billion, up 33% from last year
• Shares rose 4% as memory chip prices continue to rise while supply lags behind demand

Samsung Electronics delivered an excellent performance in the third quarter. The semiconductor division posted an operating profit of 7 trillion won.

Analysts had expected 4.7 trillion won. Samsung beat that by almost 50%.

The memory chip business drove the profit. HBM3E’s revenue reached a record level for the quarter.

These high-bandwidth memory chips are combined with AI accelerators. Companies building AI infrastructure can’t get enough of it.

Samsung shares rose 3.6% in Seoul. The market rewarded the strong results.

Total operating profit was 12.2 trillion won, about $8.5 billion. That is an increase of 33% compared to the same period last year.

Net profit was 12.01 trillion won. Wall Street forecast 9.29 trillion won.

Keeping up in the AI ​​race

Samsung lost ground to SK Hynix and Micron in advanced memory. The company made a number of strategic mistakes that allowed rivals to get ahead.

Now it’s fighting back. Production of HBM4 will be ramped up in 2026.

The company set aside 47.4 trillion won for capital expenditures in 2025. That’s about $33 billion that will go toward factory upgrades and capacity expansion.

The operating margin of the chip division tells the story. It rose from 1.4% in the second quarter to 21.1% in the third quarter.

“There is very strong demand for all things memory, and supply is lagging,” said Sanjeev Rana of CLSA Securities Korea. He expects the price development to continue for several quarters.

Market dynamics favor Samsung

The prices of DRAM and NAND chips continue to rise. Demand exceeds what manufacturers can now produce.

OpenAI, Meta Platforms and other tech giants continue to buy computing power. They need it for AI development and services.

Samsung expects this momentum to continue. The company predicts strong demand in the fourth quarter and next year.

SK Hynix made similar predictions. The AI ​​spending wave shows no signs of slowing down.

Looking ahead

The foundry business could strengthen in the fourth quarter. More orders for smartphone processors could boost that segment.

Samsung published preliminary results earlier in October. The detailed earnings report confirmed the positive figures.

Shares rose as much as 4% after the full announcement. Investors see that the recovery of memory chips is gaining momentum.

The semiconductor division achieved record quarterly turnover. The sale of HBM3E made this milestone possible.

Memory chip prices must remain high. The supply constraints are not going away anytime soon.

Samsung continues to invest heavily in production capacity. The $33 billion capital budget reflects confidence in continued demand.

The company said demand for semiconductors will remain strong as investment in artificial intelligence continues across the sector.