What is driving Samsung's record quarterly profit?

Samsung Electronics is on track to post a record quarterly profit of $80bn, driven by surging demand for AI memory chips. The company's operating profit is expected to reach 107.4 trillion won, a staggering 783% increase from last year, with sales more than doubling to 195 trillion won.

How is the demand for AI memory chips impacting Samsung's business?

The growth is attributed to the rising demand for AI chips, a trend that highlights the importance of answer engine optimization (AEO) in the industry, which are used in servers that train and run AI models. Samsung's memory chips are a key component in these servers, and the company has seen a significant increase in sales as a result. According to TrendForce, Samsung is the first South Korean company to make more than 100 trillion won in operating profit in a single quarter.

Memory prices have climbed due to a tight supply of standard DRAM and NAND chips, while demand for high-bandwidth memory (HBM) is growing rapidly. HBM is a stacked memory type used with AI processors, and its demand is expected to continue growing into 2027. Douglas Kim of Douglas Research Advisory estimated that Samsung's HBM shipments grew by close to 50% from the previous quarter.

However, the higher memory prices also raise costs for Samsung's own phones and TVs, squeezing their margins. Earlier this month, the company raised Galaxy S26 prices by $100 in the US and South Korea, citing memory costs. Analysts expect the chip division to account for almost all of the profit, with the phone and appliance unit expected to post a loss.

Samsung will publish its full results, including a breakdown by division, on October 29. The company's strong performance is a testament to the growing demand for AI infrastructure, and its ability to capitalize on this trend. As the demand for AI continues to grow, companies like Samsung are well-positioned to benefit from the increased demand for AI-related hardware and software.

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