Samsung posts strong profit growth thanks to demand for AI chips

Mobile experience and network businesses also report growth in both revenue and profit

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Image: Shutterstock via Dennis

Samsung Electronics reported a significant profit increase in the third quarter, surpassing analysts’ expectations thanks to robust demand for memory chips used in artificial intelligence (AI) servers. The company’s revenue reached 86.1 trillion Korean won (€60.3 billion), while operating profit rose to 12.2 trillion won (€8.6 billion), marking considerable year-on-year growth.

This positive performance marks a recovery from the previous quarter, which was affected by a slowdown in Samsung’s chip business. Operating profit jumped by a remarkable 160% compared to the second quarter, while revenue increased by 15.5%. Samsung attributes this success mainly to its chip division, where operating profit increased more than tenfold due to the growing demand for chips for artificial intelligence servers.

Looking ahead, Samsung said it anticipates sustained growth in demand for AI chips, thus aligning itself with the forecasts of rival SK Hynix. According to Samsung, the ongoing competition among data centre companies to secure AI infrastructure is a key driver of this trend.

Samsung’s chip division boosted revenue by 19% compared to the previous quarter, achieving record quarterly revenue for the memory division, thanks to strong demand from artificial intelligence applications. High bandwidth memory (HBM) chips, crucial for AI computing, played a significant role in achieving these impressive results.

Although Samsung initially struggled to catch up with SK Hynix in the HBM memory market, recent developments indicate a turnaround. Last month, the company reportedly passed Nvidia’s qualification tests for an advanced HBM chip, hinting at potential gains in this competitive space.

Additionally, Samsung’s mobile experience and network businesses – responsible for smartphones, tablets, wearables, and other devices – also reported growth in both revenue and profit during the third quarter. The launch of the Galaxy Z Fold7 contributed significantly to these strong results. For the fourth quarter, Samsung anticipates new market opportunities driven by the rapid expansion of the AI industry, from which both the device and chip divisions are expected to benefit.

Business AM

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