TCRX

By Steve Goldstein

South Korean technology giant Samsung Electronics posted a more than 780% leap in third-quarter operating profit from a year earlier, buoyed by booming demand for AI semiconductors.

Samsung Electronics just posted a quarter that no other tech company has ever seen.

Samsung had previously given the outline of its third-quarter results three weeks ago, so there was little surprise in numbers showing an incredible 783% increase in year-on-year operating profit, to 107.4 trillion Korean won ($80.3 billion), on revenue growth of 127% to 195.3 trillion won.

Samsung (KR:005930) said it's the first global tech company ever to exceed 100 trillion won in quarterly operating profit. In fact, Microsoft (MSFT) and Alphabet's (GOOGL) operating profit combined in the latest quarter was only 8% ahead of Samsung's.

The profits from its semiconductor division accounted for 72% of its revenue, with its memory chip division lifted by rising prices as well as increased sales of HBM4 chips.

Samsung, as with SK Hynix (KR:000660) and Micron (MU), has been securing long-term supply contracts so that it can lock in the current surge in memory prices as customers gobble supply to use in data centers.

The executive vice president for its memory division, Jeajune Kim, said it's already concluded contracts with 10 major accounts and is in talks with another 10. Kim said the scope of customers who are interested in multi-year contracts is expanding beyond hyperscalers and server makers to those with mobile, automotive and network needs.

Samsung's CFO, Sooncheol Park, said even the customers that already have long-term agreements are in talks to secure additional supply.

"We are reviewing our production capacity over the mid to long term, but given the limitation of our current capacity, we're exploring diverse scenarios from different angles, including potential shift in our product mix across applications to meet demand," said Park, according to a transcript from FactSet.

Samsung's stock fell 4%, as investors focused on the company saying it will not finalize details of a plan to return 90 trillion to 110 trillion won to shareholders until next year.

Analysts at Morgan Stanley led by Shawn Kim highlighted, however, that the long-term agreements provide visibility on capital expenditure and free cash flow into 2030. The analysts also said a sustainable foundry profit is underway.

-Steve Goldstein

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(END) Dow Jones Newswires

10-29-26 0501ET