Samsung’s Q3 profit forecast rises 9 times, chip profits may have peaked

[Financial Channel/Comprehensive Report] Driven by strong AI demand, Samsung Electronics' operating profit in the third quarter of this year is expected to increase nearly nine times. However, since the end of August, analysts have lowered their expectations by nearly 8%. With the price increase slowing down, the market believes that chip profits may have peaked.

"Reuters" reported that despite the slowdown in memory chip price increases and the strengthening of the South Korean won, the world's largest memory chip manufacturer is expected to achieve an operating profit of 106.1 trillion won (approximately NT$2.74 trillion) in the single quarter from July to September. Forecasts from 21 analysts have been revised down 7.7% since the end of August.

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Samsung's revenue is expected to increase from 12.17 trillion won (approximately NT$315.324 billion) a year ago, setting operating profit records for four consecutive quarters, highlighting the long-standing memory shortage problem as demand for AI infrastructure exceeds supply growth. In the chip manufacturing season, the chip shortage that began more than a year ago will continue into next year, and may even last until 2028.

However, price increases slowed in Q3, fueling concerns that chip profits may have peaked and raising questions about whether the AI ​​spending boom can be sustained. After more than a year of rising memory prices driven by AI-driven demand, price trends are now moderating. The gains during this period have pushed the world's largest memory makers Samsung, SK Hynix and Micron to record profits.

TrendForce predicts that Q4 traditional DRAM contract prices will increase by 10% to 15% compared with the previous quarter, which is slower than the approximately 60% increase in the previous quarter.

Avril Wu, senior vice president of research at TrendForce, said that although market supply is still tight, the price increase is expected to slow down, and suppliers are worried that further significant price increases may damage demand for various consumer electronics products. In addition, long-term agreements represent an increasing share of a supplier's total output. Price increases have slowed due to the price cap mechanism.

SK Securities analyst Han Dong-hee predicts that Samsung’s Q3 memory chip operating profit rate will reach 76%, the same as the previous quarter. Samsung is facing increasing competition from Chinese rivals, which focus on relatively low-end products but are still benefiting from a shortage of AI-driven memory.

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