Samsung's Q3 profit seen jumping nine-fold, but chip margins may be flat

Business Recorder reported that Samsung Electronics is forecast to earn 106.1 trillion won ($79.1 billion) in operating profit during the July-September quarter, a leap of close to ninefold from 12.17 trillion won a year earlier. The projection rests on strong demand for artificial intelligence hardware, although analysts have trimmed their estimates by almost 8% since late August. The LSEG SmartEstimate, which draws on 21 analysts and gives greater weight to those with better track records, shows a 7.7% reduction over the same period.

Memory chip prices are still climbing, but the pace has slowed, prompting concern that margins may have reached a peak. TrendForce expects conventional DRAM contract prices to rise 10% to 15% in the fourth quarter, compared with a roughly 60% surge in the second quarter. The won gained 14.3% against the dollar in the third quarter, which shrinks the value of overseas earnings once converted.

Samsung is also expected to lift sales of high-bandwidth memory chips, which are central to AI data centres, as it narrows its gap with SK Hynix. J.P. Morgan projects Samsung's share of that segment at 34% for the current year, up from 20% a year earlier, while SK Hynix is forecast to fall to 46% from 60%. Chinese producers are meanwhile benefiting from the same shortage, though their output remains concentrated in cheaper products.