Samsung Becomes the First Tech Company to Earn ₩100 Trillion in a Quarter, Warns AI Memory Demand Will Far Exceed Supply in 2027

Samsung Electronics has posted the most profitable quarter in the history of the technology industry, according to its own assessment, as the artificial intelligence boom sent memory chip prices and demand to unprecedented levels.

The South Korean company reported revenue of ₩195.3 trillion for the July-September quarter, an all-time quarterly high and 14% higher than the previous quarter, according to its earnings release on Thursday, October 29. Operating profit reached ₩107.4 trillion. Samsung said it is the first technology company to exceed ₩100 trillion in quarterly operating profit.

The result comes a day after rival SK hynix reported operating profit of ₩83.3 trillion, underscoring the extraordinary windfall that the AI boom has delivered to Korea's memory chip makers.

Chips drive everything

Samsung's Device Solutions (DS) division, which includes memory, foundry and chip design, accounted for almost all of the profit. The division reported revenue of ₩147.1 trillion, up 15% from the previous quarter, and operating profit of ₩106.5 trillion.

The memory business posted record quarterly revenue and operating profit, driven by AI demand and higher prices across all applications. Sales of HBM4, the latest generation of high-bandwidth memory used alongside AI processors, scaled up significantly.

HBM has been the most important battleground in the memory industry. SK hynix took an early lead as Nvidia's main supplier, and Samsung has been working to catch up. Significant growth in HBM4 sales suggests that Samsung is gaining ground in the most valuable segment of the market.

A bold outlook for 2027

Samsung expects AI infrastructure investment to remain strong in the fourth quarter of 2026. More strikingly, it expects AI-driven demand in 2027 to far exceed industry supply, compared with 2026.

That outlook suggests memory prices could remain elevated, or rise further, next year, supporting profits for Samsung, SK hynix and Micron. It also implies continued cost pressure for companies that buy memory, including smartphone and PC makers, cloud providers and AI infrastructure builders.

Foundry and chip design

Samsung's foundry business, which manufactures chips for other companies, improved its earnings on sales of HBM base dies and advanced-node chips. It is targeting double-digit revenue growth in the fourth quarter. Samsung's new fabrication plant in Taylor, Texas, is set to begin operations in 2027.

The System LSI business, which designs chips such as smartphone processors and image sensors, grew revenue on mass production of chips for new models launched in the second half.

Phones and TVs under pressure

Outside chips, Samsung's businesses were weaker. The MX (mobile) and Networks division reported combined revenue of ₩37.7 trillion but an operating loss of ₩0.6 trillion, as cost pressures, including higher memory prices, weighed on earnings despite new flagship launches, including foldable phones.

The visual display and digital appliances businesses reported combined revenue of ₩13.9 trillion and an operating loss of ₩0.2 trillion, hurt by higher raw material and logistics costs. Harman, Samsung's automotive and audio unit, improved its earnings, helped by one-off US tariff refunds.

Samsung Display reported revenue of ₩8.0 trillion and operating profit of ₩1.1 trillion.

The divergence highlights a paradox: soaring memory prices that boost Samsung's chip profits also raise costs for its own phones and appliances.

Massive investment

Samsung invested ₩29 trillion in capital expenditure in the third quarter, including ₩27.2 trillion in chips. It expects full-year capital spending of about ₩84.4 trillion, with ₩76.8 trillion going to the chip business.

Rewarding shareholders

Samsung declared a third-quarter dividend of ₩4,601 per common and preferred share, totalling ₩30 trillion. It estimates total shareholder returns for 2026 at ₩90 trillion to ₩110 trillion, including a large share buyback and cancellation programme plus cash dividends. Its next shareholder return policy will be finalised at a board meeting in late January 2027.

The generous returns follow SK hynix's announcement of ₩60 trillion in additional payouts and reflect pressure on Korean companies under the government's "Value-up" programme to improve shareholder returns.

What it means for India

Samsung is one of the largest foreign investors in India, with one of the world's biggest smartphone factories in Noida and major research and development centres in Bengaluru, Noida and Delhi. Its mobile business is a market leader in India.

Higher memory prices could push up smartphone and laptop prices for Indian consumers, potentially affecting demand in a price-sensitive market. At the same time, Samsung's financial strength supports continued investment in its Indian operations, including manufacturing for export.

Market reaction

Samsung shares had surged more than 8% ahead of the results, as investors anticipated strong numbers following SK hynix's report. Korean stocks have rebounded sharply this week after a steep sell-off earlier in October.

The memory supercycle

Samsung's record results are part of what analysts describe as a memory supercycle, driven by demand for AI. Data centres building AI systems need vast amounts of high-bandwidth memory, conventional DRAM and NAND flash storage, and supply has struggled to keep up. As a result, memory prices have risen sharply, boosting the profits of Samsung, SK hynix and Micron.

Memory has historically been a cyclical business, with periods of shortage and high prices followed by oversupply and falling prices. Samsung's forecast that demand will exceed supply in 2027 suggests that it expects the current upswing to last longer than previous cycles, though investors remain alert to the risk that heavy investment in new capacity could eventually lead to oversupply.

Catching up in HBM

Samsung has trailed SK hynix in supplying high-bandwidth memory to Nvidia, the largest buyer of HBM for AI accelerators. Closing that gap has been one of Samsung's top priorities, and progress in qualifying its latest HBM products with Nvidia and other customers is closely watched. Success in HBM would allow Samsung to capture a larger share of the most profitable segment of the memory market.

What comes next

Investors will watch Samsung's progress in HBM supply to Nvidia and other AI chipmakers, the trajectory of memory prices, and the start of production at its Texas plant. The company's January shareholder return announcement will also be closely watched as Korea's largest company sets the tone for corporate governance reform. Investors will also look for updates on Samsung's HBM qualification with major AI chip customers, the pace of its capital spending and the delivery of its promised shareholder returns, which together will shape how the market values the company through 2027.