Samsung Electronics has announced an anticipated nine-fold increase in its quarterly profits compared to the same period last year, attributing this growth to rising demand for memory chips utilized in artificial intelligence (AI) data centers. The company estimates its operating profit for the quarter ending September will reach 107.4 trillion won (£61 billion; $80 billion), marking its fourth consecutive quarter of record earnings.
As one of the largest memory chip manufacturers globally, alongside SK Hynix and Micron, Samsung produces chips essential for AI companies such as Nvidia. In addition to its chip business, Samsung is expected to benefit from the recent launch of its latest folding smartphones, including the Galaxy Fold and S26, which debuted in August.
The full earnings report for the third quarter will be published at the end of October. Major South Korean corporations typically provide earnings previews to inform investors before detailed reports are released.
The global demand for computer chips that facilitate AI development has significantly boosted the earnings and stock prices of related manufacturers. This increase in demand has contributed to a worldwide semiconductor shortage, benefiting companies like Samsung, whose market valuation surpassed $1 trillion (£757 billion) earlier this year.
Investment in the semiconductor industry has surged, with US technology firms such as Google, Amazon, and Meta committing over $650 billion to AI initiatives this year. In June, South Korea announced plans for a minimum of $880 billion in projects led by Samsung and SK Hynix to enhance the country's chip manufacturing capabilities in the coming years.
Other Asian competitors in Japan, China, and Taiwan are also heavily investing in chip production as AI demand continues to rise. The chip shortage has prompted companies, including Samsung, to increase prices, resulting in higher costs for products like smartphones and computers.