Samsung set for highest Q3 profit in three years

SEOUL, Oct 13 (Reuters): Samsung Electronics is expected to post its highest third-quarter profit since 2022, driven by higher memory chip prices supported by server demand as customers rebuild inventories, analysts' estimates showed.

The world's biggest maker of memory chips is projected to report an operating profit of 10.1 trillion won ($7.11 billion) for the July-September period, according to LSEG SmartEstimate from 31 analysts, which is weighted toward those who are more consistently accurate. This would be up 10 per cent from a year earlier.

Analysts attributed the recovery mainly to better conventional memory chip pricing, which would offset weaker sales volumes of high-bandwidth memory (HBM) chips as Samsung has yet to supply its latest HBM products to Nvidia.

HBM chips, critical for artificial intelligence (AI) development, are designed to reduce power consumption and process large datasets by stacking chips vertically.

Analysts said demand for memory chips, particularly from hyperscalers and AI-related investments for services such as ChatGPT, have put more workload on general servers, thus boosting conventional memory chip prices.

Prices of some DRAM chips, widely used in servers, smartphones and PCs, jumped 171.8 per cent in the third quarter from a year earlier, according to TrendForce data.

While Samsung's conventional memory business performed well, analysts said delays in supplying its latest 12-layer HBM3E chips to Nvidia have hurt its profit and share price.