Main Highlights
- Samsung reported a significant Q3 profit surge nearing 12.2 trillion Korean won, more than doubling from the previous quarter and exceeding Wall Street’s estimates.
- This recovery was primarily driven by a strong performance in the company’s chip division, particularly its High-Bandwidth Memory (HBM) chips for AI applications.
- The Device Solutions division saw operating profit rise to 7.0 trillion won, with record-high sales attributed to the growing demand for AI processing power.
- Samsung’s mobile division also contributed positively, with operating profit reaching 3.6 trillion won, boosted by sales of flagship devices like the Galaxy Z Fold7.
- The company anticipates continued growth, projecting that the expanding AI industry will create new market opportunities for both its device and semiconductor businesses.
Samsung’s Q3 Earnings Exceed Expectations on Chip Recovery
Samsung has reported a substantial leap in its third-quarter operating profit, reaching 12.2 trillion Korean won. This figure more than doubles the profit from the previous quarter and surpasses Wall Street’s expectations.
The company’s revenue for Q3 climbed to 86.1 trillion won, surpassing the LSEG SmartEstimate forecast of 85.93 trillion won. Samsung also exceeded its own guidance, which had predicted around 12.1 trillion won.
Compared to the same quarter last year, revenue saw an increase of 8.85%, while operating profit rose by 32.9%. However, the most notable improvement comes from the June quarter, which was impacted by weaker chip demand.
Profit surged by an impressive 160% from Q2, with revenue also climbing 15.5% quarter-over-quarter. Following the announcement of these results, Samsung’s shares experienced a jump of over 5% in early Asian trading.
Chip Unit Drives Profitability After a Challenging Q2
Samsung’s Device Solutions division, which encompasses memory chips, foundry, and logic operations, was identified as the main driver behind this quarterly surge, according to the earnings report.
⚡ The chip division generated 7.0 trillion won in operating profit, a significant increase from the 3.86 trillion won reported in Q3 of the previous year. Unit sales reached 33.1 trillion won, up from 29.27 trillion won in the same quarter last year, marking a 19% rise from Q2 alone.
The primary catalyst for this performance is the escalating demand for Artificial Intelligence (AI) solutions. Samsung’s High-Bandwidth Memory (HBM) chips, crucial for AI processing, achieved record-high sales, contributing to the division’s highest quarterly revenue ever.
This turnaround marks a strong comeback from the previous quarter, when the semiconductor segment faced significant headwinds. The memory sector, in particular, has seen unprecedented growth, fueled by the global race to establish AI data centers and large-scale computing infrastructure.
While Samsung had previously fallen behind SK Hynix in the HBM chip market, reports indicate that the company recently passed Nvidia’s qualification tests for a new generation of advanced HBM chips, representing a key strategic win.
📊 According to Counterpoint Research, Samsung also regained its leading position in the overall memory market during Q3, surpassing SK Hynix after trailing in Q2.
Looking ahead, Samsung is focused on scaling up its production of HBM4 chips in preparation for 2026, signaling its ambition for market dominance in the next wave of AI memory technology.
Mobile and Network Businesses Also Show Strong Performance
Samsung’s mobile and network divisions, responsible for smartphones, tablets, and wearables, also delivered a solid quarter. This segment posted an operating profit of 3.6 trillion won, an increase from the 2.82 trillion won recorded a year prior.
The company attributed this uplift to robust sales of its premium devices, including the recently launched Galaxy Z Fold7. The overall device unit experienced growth in both sales and profit.
💡 Samsung anticipates that the rapid expansion of the AI industry will continue to open new market avenues for both its device and semiconductor businesses in the current quarter.
In summary, Samsung experienced a challenging Q2 but regrouped effectively in Q3, driven by a resurgence in its chip and smartphone businesses, significantly bolstered by advancements in AI technology.
Expert Summary
Samsung’s Q3 earnings showcased a remarkable recovery, largely propelled by its semiconductor division’s strong performance in high-demand AI chips like HBM. The company’s strategic focus on next-generation memory technology appears to be paying off, with projections for continued growth supported by the expanding AI market.