Samsung Electronics projected a record third-quarter 2026 operating profit of 107.4 trillion won ($80.2 billion), a nearly ninefold increase driven by booming AI-related memory chip demand. This marks the first time a tech company has topped 100 trillion won in quarterly profit. However, a strengthening South Korean won and rising component costs have squeezed margins for Samsung's consumer electronics and smartphone divisions, which suffered over 1 trillion won in combined losses.
Samsung's record third-quarter financial results
- ▪Samsung Electronics projected a third-quarter operating profit of 107.4 trillion won ($80.2 billion) for the July-September 2026 period, representing a nearly ninefold increase from 12.17 trillion won in the same period in 2025
- ▪Samsung Electronics estimated its third-quarter 2026 revenue would rise 127% year-on-year to 195 trillion won
- ▪Samsung Electronics is scheduled to release its detailed third-quarter 2026 earnings results, including a breakdown by business division, on October 29, 2026
- ▪The projected 107.4 trillion won operating profit marks Samsung Electronics' fourth consecutive quarter of record operating profit and makes it the first technology company to report over 100 trillion won in quarterly operating profit
- ▪The South Korean won strengthened 14.3% against the U.S. dollar in the third quarter of 2026, creating a currency headwind that reduced the value of Samsung Electronics' overseas earnings
Surging demand for AI memory chips
- ▪Douglas Research Advisory estimated that Samsung Electronics' high-bandwidth memory bit shipments expanded by nearly 50% quarter-over-quarter in the third quarter of 2026
- ▪J.P. Morgan estimated that Samsung Electronics' high-bandwidth memory market share will rise to 34% in 2026 from 20% in 2025, while competitor SK Hynix's share is forecast to fall to 46% from 60%
- ▪Soaring demand for artificial intelligence infrastructure has driven a surge in memory chip prices and sales, particularly for high-bandwidth memory chips essential for processing AI data
Memory chip profit margins
- ▪SK Securities analyst Han Dong-hee estimated that Samsung Electronics' memory-chip operating profit margin would reach 76% in the third quarter of 2026, flat compared to the preceding quarter
- ▪A more-than-one-year-long AI-driven memory chip rally propelled the world's largest memory producers, including Samsung Electronics, SK Hynix, and Micron, to record profits and margins
Global memory chip market outlook
- ▪Market researcher TrendForce projected that conventional dynamic random-access memory contract prices will rise 10% to 15% in the fourth quarter of 2026, slowing from a second-quarter 2026 surge of approximately 60%
- ▪Chipmakers and analysts expect the global memory chip shortage, which began in 2025, to persist into 2027 and potentially through 2028 as demand for AI infrastructure outpaces supply growth
- ▪Analysts expect conventional dynamic random-access memory bit shipments to remain flat in the third quarter of 2026 due to limited inventories
Long-term supply contracts
- ▪Long-term supply deals between chipmakers and customers have limited price gains in exchange for guaranteed supply
- ▪Samsung Electronics stated in July 2026 that it aimed to secure long-term contracts for approximately two-thirds of its memory output to reduce exposure to the semiconductor industry's boom-and-bust cycles
Micron market outlook
- ▪U.S. chipmaker Micron projected its gross margin would slip to 86.3% in the current quarter from 87%, partially due to employee compensation costs
- ▪U.S. chipmaker Micron projected that the global memory chip market could be tighter in 2027 and 2028 than in 2026
Consumer electronics challenges
- ▪Analysts estimated that Samsung Electronics' smartphone and home appliances businesses suffered more than 1 trillion won in combined operating losses in the third quarter of 2026 due to rising chip costs
- ▪Samsung Electronics' consumer electronics business has struggled to pass on rising chip costs to its customers
Debatable claims
- ▪The AI-driven boom in memory chips has peaked
- ▪Soaring memory chip prices do more harm than good to the technology industry
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