Samsung Forecasts Ninefold Profit Surge as AI Chip Demand Soars

Samsung Electronics expects its quarterly operating profit to jump nine times year-on-year, driven by soaring demand for memory chips used in artificial intelligence (AI) data centres.

Samsung expects record quarterly profit

The technology giant expects operating profit to reach 107.4 trillion won (£61 billion, $80 billion) for the three months to the end of September. That would mark the company’s fourth consecutive quarter of record profits.

Samsung is one of the world’s largest memory chip manufacturers, alongside South Korean rival SK Hynix and US-based Micron. Their chips are essential to AI companies such as Nvidia.

AI chip demand drives Samsung’s growth

Global demand for the computer chips that power AI development remains extremely strong, boosting profits and stock prices for companies linked to the technology.

The surge in demand in recent years has contributed to a global semiconductor shortage, increasing sales for manufacturers such as Samsung. It also pushed the company’s stock market valuation above $1 trillion (£757 billion) earlier this year.

Chip shortages caused by rising demand have enabled companies such as Samsung to increase prices, making products including smartphones and computers more expensive.

Samsung prepares to promote its latest folding phone

Samsung, which manufactures Galaxy Fold and S26 smartphones, is also expected to promote sales of its latest folding device, released in August.

The company’s full third-quarter financial results are expected to be released at the end of October.

Major South Korean companies typically publish earnings previews to advise investors ahead of more detailed financial reports.

Global investment in AI and semiconductor manufacturing

Investment in the semiconductor industry is surging. US technology giants including Google, Amazon and Meta have pledged to spend more than $650 billion on AI projects this year.

In June, South Korea announced plans to spend at least $880 billion on projects led by Samsung and SK Hynix to expand domestic chip manufacturing capacity over the next few years.

Asian rivals including Japan, China and Taiwan are also investing heavily in chip factories as demand for AI technology continues to rise.