Stories
Samsung's Profit Multiplies By Nine Driven By AI Chip Boom
- •Samsung's operating profit surged nearly 9 times to a record 107.4 trillion Korean won in the September quarter.
- •The massive earnings surge was primarily driven by skyrocketing memory chip prices and strong demand.
- •AI companies aggressively pre-booked chip supplies, while Samsung increased the supply of high-end HBM chips.
- •Memory chips like DRAM and NAND are seeing surging demand as they are critical for computers, servers, and AI data centers.
- •Even with modest growth in sales volume, higher average selling prices significantly boosted the company margins and profits.
Key Questions Answered
Samsung's operating profit surged nearly 9 times to a record 107.4 trillion Korean won due to a massive spike in memory chip sales and prices. The explosive growth of AI companies pre-booking chip supplies and increased shipments of expensive high-bandwidth memory (HBM) and memory chips like DRAM and NAND drove the earnings.
Memory chip prices increased rapidly as global companies spent billions on AI data centers, creating supply pressure and pushing up average selling prices. For example, DRAM average selling prices jumped about 20% and NAND prices rose about 19%, allowing profit and margins to grow rapidly even with only slight shipment increases.
According to a Reuters report cited in the details, the current shortage of memory chips driven by intense demand from AI infrastructure and data centers is expected to persist until 2027.
