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South Korean tech giant Samsung Electronics reported a 32 percent year-on-year increase in third-quarter profits on Thursday, primarily driven by AI-fueled market demand for memory chips. The artificial intelligence industry has significantly boosted both Samsung and SK Hynix, two of the world's leading memory chip manufacturers, as their products have become essential for AI infrastructure. This latest earnings report marks a sharp turnaround for Samsung, whose profits had plunged by over 50 percent in the second quarter due to US restrictions on AI chip exports to China.
"Operating profit increased to 12.2 trillion won (US$8.5 billion). The Device Solutions (DS) Division reported a 19 percent increase in sales quarter-on-quarter, with the Memory Business setting an all-time high for quarterly sales," the company said in its earnings statement.
Its smartphone division logged an 11 percent rise quarter-on-quarter in revenue "due to the successful launch of new foldable phones and solid flagship sales", it added.
Looking ahead to Q4, the rapid growth of the AI industry is expected to open up new market opportunities for both the DS and DX Divisions," it said, referring to its chips and smartphone units.
The current boom in AI has pushed up prices and shipments of conventional NAND and DRAM memory chips, alongside soaring demand for high-bandwidth memory (HBM) chips used in AI servers.
Samsung said it would invest 40.9 trillion won in its semiconductor facilities this year to meet this growing demand. "The DS division will focus on transitioning to advanced processes and reinforcing existing production lines to meet demand for high-value products," the company said.
Following the earnings report, Samsung's shares broke a previous record, jumping more than five percent to 105,800 won in the first 30 minutes of trading.
Samsung signed in July a $16.5 billion deal with Tesla under which it will provide the electric car maker with AI6 chips through the end of 2033.
The agreement is expected to provide a major boost to Samsung, which has faced headwinds in its foundry business, lagging rivals SK hynix and Taiwan's TSMC in the race for cutting-edge artificial intelligence chips.
