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Samsung Electronics is expected to post third-quarter operating profit of 106.1 trillion won ($79.1 billion), nearly nine times its year-earlier result, as demand for artificial-intelligence infrastructure sustains a shortage of memory chips. But analysts have lowered their forecasts in recent weeks, and the chip division’s profit margin is expected to hold steady rather than expand.
The estimate, based on the LSEG SmartEstimate of 21 analysts, would mark Samsung’s fourth consecutive quarter of record operating profit. The company is due to issue preliminary third-quarter results on Thursday, October 8, with a fuller breakdown expected later in October. Until then, the profit figure and division-level outlook remain forecasts, not reported results.
Forecasts trimmed as price gains slow
The consensus operating-profit estimate has fallen 7.7% since the end of August. Even after that reduction, it remains far above the 12.17 trillion won Samsung reported for the third quarter a year earlier, reflecting the scale of the earnings rebound during the memory-chip shortage.
Demand for chips used in AI data centers has outpaced supply growth, helping lift memory prices and profits across major producers. Industry expectations point to continued tight supply into next year and potentially through 2028, though slower price increases have raised questions about whether chipmakers’ margins have reached a high point.
TrendForce expects conventional DRAM contract prices to rise 10% to 15% in the fourth quarter from the previous quarter. That would be a marked slowdown from an increase of roughly 60% in the second quarter. The research firm has said supply remains tight, but price growth is moderating.
Flat margin forecast and customer contracts
SK Securities analyst Han Dong-hee estimates Samsung’s memory-chip operating margin at 76% for the third quarter, unchanged from the previous quarter. That forecast suggests the company may still generate exceptionally high profitability from memory while getting less of a margin lift from additional price increases.
Long-term supply agreements are one factor shaping prices. Such contracts can provide chipmakers with more predictable sales volumes, but agreements that include price ceilings can limit gains when spot and contract prices rise rapidly. Samsung said in July it aimed to have long-term contracts cover about two-thirds of its memory output.
The trend has implications beyond Samsung’s semiconductor business. Higher memory prices raise input costs for smartphone and consumer-electronics makers, including Samsung’s own device operations, while suppliers must weigh further price increases against the risk of weakening demand. The available forecasts do not establish how those pressures affected Samsung’s individual divisions in the quarter.
Currency, competition and AI memory
Currency movements may also weigh on the won value of Samsung’s overseas earnings. The South Korean won strengthened 14.3% against the U.S. dollar in the third quarter, its largest quarterly gain since early 1998, according to Reuters. A stronger won reduces the translated value of revenue earned in dollars.
Samsung also faces rising competition from Chinese producers in conventional DRAM and NAND flash memory. Summit Insights Group analyst Kinngai Chan reported that more original-equipment manufacturers and original-design manufacturers are adopting Chinese products. The report describes those rivals as concentrated in lower-end products, so it remains unclear how much the shift may affect Samsung’s higher-value offerings.
In high-bandwidth memory, a key component in AI accelerators and data-center systems, Samsung is expected to gain ground against SK Hynix. J.P. Morgan estimates Samsung’s HBM market share will rise to 34% this year from 20% last year, while SK Hynix’s share is forecast to decline to 46% from 60%. Those are estimates, not company-reported market-share figures.
Thursday’s preliminary results are next
Investors will get an initial measure of Samsung’s performance when the company releases preliminary results on October 8. The detailed report later in October should provide more information about the contribution of semiconductors and other businesses, as well as how actual earnings compare with analyst expectations.
For now, the outlook combines unusually high forecast profits with signs that the pace of improvement may be easing: analysts have cut estimates, memory-price increases have slowed, and the projected chip margin is flat quarter over quarter. Whether demand, pricing and Samsung’s HBM shipments can sustain results at these levels will be clearer only after the company reports.
