Samsung Electronics Posts Record Q3 Chip Revenue as AI Demand Surges

Samsung Semiconductor Revenue Hits All-Time High

Samsung Electronics Co. reported record third-quarter semiconductor revenue of 28.7 trillion won ($21.4 billion), a 47% increase from the same period a year earlier, as surging demand for high-bandwidth memory chips used in artificial intelligence data centers drove the company's recovery from a prolonged downturn.

The South Korean conglomerate posted consolidated operating profit of 9.18 trillion won for the three months ended September 30, beating the 8.6 trillion won consensus estimate compiled by analysts at Yonhap Infomax. The memory division alone contributed 5.4 trillion won in operating profit, reversing a 3.7 trillion won loss recorded in the same quarter of 2024.

HBM Shipments Drive the Rebound

High-bandwidth memory shipments more than tripled year-over-year, according to Samsung's earnings presentation. The company said it had begun mass production of its 12-layer HBM3E chips and expected to supply them to major North American hyperscalers by the first quarter of 2026.

"The AI investment cycle is far from peaking," said Greg Roh, head of research at HMC Securities in Seoul. "Samsung's HBM ramp is about six months behind SK Hynix, but the total addressable market is growing fast enough to absorb both suppliers."

Foundry Business Remains a Weak Spot

Samsung's contract chip-manufacturing division continued to lag expectations. Foundry revenue fell 8% sequentially as the company struggled to win orders for its 3-nanometer gate-all-around process against Taiwan Semiconductor Manufacturing Co., which commands roughly 62% of the global foundry market.

Executives acknowledged yield issues at the Pyeongtaek fabrication complex but said corrective measures were underway. Capital expenditure for the semiconductor segment totaled 13.7 trillion won in the quarter, with roughly 70% directed toward memory expansion.

Mobile and Display Divisions Steady

The mobile experience division reported 27.4 trillion won in revenue, up 3% year-over-year, supported by steady sales of the Galaxy S25 series and foldable devices. The display panel segment posted a narrow operating profit of 0.9 trillion won, aided by OLED shipments to Apple for the iPhone 17 lineup.

Market Reaction and Outlook

Shares of Samsung rose 3.2% in morning trading on the Korea Exchange following the earnings release, bringing year-to-date gains to 14%. The stock trades at 1.3 times book value, a discount to SK Hynix's 2.8 multiple.

Samsung guided for stronger fourth-quarter results, citing seasonal demand for consumer electronics and continued AI server buildouts. Analysts at Morgan Stanley maintained an overweight rating with a price target of 85,000 won, implying 18% upside from current levels.

The next catalyst for the stock is expected in January, when Samsung is scheduled to provide a detailed roadmap for its next-generation HBM4 chips at the Consumer Electronics Show in Las Vegas.