Samsung flags a 107.4 trillion won quarter as memory prices stay tight

Samsung Electronics said on Thursday that third-quarter operating profit would come in at 107.4 trillion won, about 80.17 billion dollars at 1,339.57 won to the dollar. That is a little above the LSEG SmartEstimate of 106.1 trillion won, and it is the first time a technology company has guided to a quarterly profit above 100 trillion won. Revenue is estimated at 195 trillion won, up 127 percent from a year earlier. The figures are guidance, not the audited split. Samsung will publish the divisional results on 29 October.

The year-on-year jump in profit is close to ninefold. It is the fourth straight quarter of record operating profit. The driver is memory. Samsung is the largest memory maker, and prices for conventional DRAM and NAND have risen because supply has not kept up with orders for artificial-intelligence hardware. High-bandwidth memory, the stacked chips used to move data inside those systems, is the tightest part of the book. Douglas Kim of Douglas Research Advisory estimated that Samsung's HBM bit shipments grew close to 50 percent from the second quarter to the third, as the company tried to close ground on SK Hynix.

The phone business is on the other side of the same price

The chip shortage that lifts the semiconductor division squeezes the rest of the company. Analysts expect the mobile business to lose more than 1 billion dollars in the quarter, a larger loss than the market had pencilled in, because component costs have risen faster than handset prices. The foundry business, where Samsung competes with TSMC for contract manufacturing, is also expected to stay in loss. A 55 percent margin on the group, the figure some tallies have put on the guidance, is a memory number wearing a company label. The 29 October release is the document that will show how much of the 107.4 trillion won is chips, and how much is everything else.

Kim Seok-hwan at Mirae Asset Securities said the market's question has moved. The issue is no longer whether the jump that began a year ago is large. It is whether it lasts. Samsung, Micron and TrendForce have said the shortage can run into 2028. Contract prices for conventional DRAM are still expected to rise 10 to 15 percent in the fourth quarter, against a rise of about 60 percent in the second. Quarter-on-quarter profit growth is expected to slow to about 8.2 percent in the fourth quarter, from about 20 percent in the third. Gross margins at the top producers are estimated above 80 percent. Those are analyst figures, not Samsung's guidance.

The share price has not followed the profit

The stock is more than 25 percent below the record it set in June. A guidance beat of 107.4 against 106.1 does not, by itself, answer the duration question Kim Seok-hwan named. Investors who sold the June high were discounting a peak in memory prices. Thursday's release says the peak is not in the third-quarter number. It does not say where the fourth quarter or 2027 sits. HBM4 is already shipping to Nvidia, and the company has been reported to have quality approval for HBM4E, the part aimed at Nvidia's Rubin Ultra platform. Approval is not a volume. The 29 October tables will show bits and prices. Until then the 50 percent shipment estimate is Douglas Kim's, not Samsung's.

For buyers of phones and of servers the split matters in opposite directions. A handset maker inside Samsung is paying the same memory price that the chip division is charging the market. A cloud company ordering HBM is paying it directly. The guidance says the second of those flows is, this quarter, large enough to carry a loss of more than 1 billion dollars on the first and still print 80 billion dollars of operating profit. That is the concrete fact in the release. The rest is a date: 29 October, when the estimate becomes a set of divisional accounts.