Samsung Electronics expects quarterly operating profit to soar ninefold year-on-year as booming demand for memory chips used in artificial intelligence data centres fuels record earnings.
Samsung Electronics expects its quarterly operating profit to surge ninefold compared with a year earlier, as booming demand for memory chips used in artificial intelligence data centres continues to drive the global semiconductor market.
The South Korean technology giant forecast an operating profit of 107.4tn won (£61 billion) for the three months to the end of September, which would mark its fourth consecutive quarter of record earnings.
Samsung is one of the world’s biggest memory chip manufacturers, alongside South Korea’s SK Hynix and US-based Micron.
Their products are essential components in the powerful computing systems used by AI companies such as Nvidia.
The company’s full third-quarter results are due to be published at the end of October, but South Korean companies commonly issue earnings forecasts ahead of their detailed financial reports.
Those forecasts are closely watched by investors because they are based on internal company data rather than estimates from external analysts.
Samsung has benefited from a surge in global spending on AI infrastructure, as technology companies race to build data centres capable of training and running increasingly powerful AI models.
US technology giants including Google, Amazon and Meta are expected to invest more than $650 billion in AI projects this year, helping to drive demand for the chips and other components needed to build the infrastructure.
The rapid expansion has contributed to shortages in some parts of the semiconductor market and pushed up prices, benefiting manufacturers such as Samsung.
Samsung is also expected to receive a boost from its consumer electronics business, following the launch of its latest foldable smartphones in August.
The company makes the Galaxy Fold range and its S26 smartphones, as well as televisions, appliances and other electronic products.
Samsung’s stock market valuation crossed $1 trillion (£757 billion) earlier this year as investors bet on continued growth in the AI sector.
South Korea is also seeking to strengthen its position as a global chipmaking hub.
In June, the government unveiled plans for at least $880 billion in projects led by Samsung and SK Hynix to expand the country’s semiconductor manufacturing capabilities in the coming years.
Other major economies, including Japan, China and Taiwan, are similarly investing heavily in new chip plants.
The boom is not without consequences for consumers, however.
Higher semiconductor prices have contributed to rising costs for manufacturers, potentially making products such as smartphones and computers more expensive.
For Samsung, though, the AI boom is proving to be a powerful engine for growth.
Samsung expects profits to boom because of AI chip demands
