SEOUL
Samsung Electronics reported third-quarter operating profit in line with analyst expectations, driven by surging demand for memory chips used in artificial intelligence. Operating profit rose 783 percent year-over-year and revenue climbed 127 percent, marking the fourth consecutive quarter of record results.
Yet Samsung shares fell 5 percent on the announcement—a rare disconnect that reflects investor anxiety about the company's tightening business model. The semiconductor division generated 147.1 trillion won in revenue and 106.5 trillion won in operating profit, accounting for nearly all of the company's bottom-line gains. Memory chips—particularly HBM4 for AI servers and solid-state drives—fueled the quarter.
The paradox is stark. Samsung became the first global tech company to exceed 100 trillion won in quarterly operating profit. Investors treated it as a baseline, not a milestone.
"Investors have become accustomed to strong AI-driven performance," said Josh Gilbert, lead analyst for APAC at eToro. "The company is essentially a memory maker with a phone business attached. Its future depends entirely on memory prices staying elevated."
That dependency is the market's real concern. Memory is a commodity business with cyclic pricing power. Samsung's profit surge rests on undersupply in 2024 and 2025—a condition unlikely to persist as new capacity comes online. The company has no pricing control beyond the cycle.
Samsung plans to secure long-term AI infrastructure contracts and expects memory demand to accelerate in 2027 as customers lock in supply. The company also invested $500 million (via Samsung Electronics) into KKR-backed Helix Digital Infrastructure, signaling confidence in sustained AI capex.
On shareholder returns, Samsung announced 30 trillion won in third-quarter dividends and plans to deploy 55 trillion to 75 trillion won through dividends and buybacks by year-end. The board will finalize execution at a meeting in late January 2027.
