Samsung Electronics Q3 net profit up 21 pc on strong chip sales

Seoul, Oct 30 Samsung Electronics on Thursday said its net profit shot up 21 per cent in the third quarter from a year earlier with the chip segment posting a record performance amid the artificial intelligence (AI) industry boom.

Net profit came to 12.22 trillion won ($8.6 billion) in the July-September period, up 21 per cent from the 10.1 trillion won tallied a year earlier, the company said in a regulatory filing.

Operating profit for the three-month period surged 32.5 per cent on-year to 12.16 trillion won. Revenue increased 8.8 percent to 86.06 trillion won, reports Yonhap news agency.

The earnings beat market expectations. The average estimate of net profit by analysts stood at 10.13 trillion won, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.

The semiconductor division posted a record 7 trillion won in operating profit, sharply rising from just 400 billion won tallied in the second quarter, partly driven by the strong performance of high bandwidth memory (HBM) products. It also marks a sharp increase from the 3.9 trillion-won operating profit posted in the third quarter of 2024.

"The memory business achieved record-high quarterly revenue by expanding HBM3E sales while proactively addressing strong demand across all applications," the company said in a release.

"HBM3E is currently in mass production and being sold to all related customers, while HBM4 samples are simultaneously being shipped to key clients," it added. "A favorable price environment and notably reduced one-off costs such as inventory value adjustments contributed to higher profits."

Samsung added the foundry business also achieved record-high customer orders during the quarter.

Its DX division, which includes mobile, TV and home appliance businesses, saw its operating profit reach 3.5 trillion won amid the popularity of foldable smartphones, the company said.

Of the DX division, Samsung said the mobile sector posted an operating profit of 3.6 trillion won on "the strong launch of Galaxy Z Fold 7 and improved sales of tablets and wearables."

The visual display arm, however, posted an operating loss of 100 billion won due to what the company called "intensified competition."

Looking ahead, Samsung said the AI boom is expected to benefit all of its business arms, including chips and smartphones, in the fourth quarter. The company said it will proactively respond to demand from the AI industry with HBM3E, high-density eSSDs and other leading-edge memory products.

Samsung will expand sales of mobile products with its premium lineup, including tablets and wearables, it added.

Samsung noted its annual facility investment for this year is estimated to reach 47.4 trillion won, with the semiconductor division accounting for 40.9 trillion won.

The company said its accumulated investment in research and development projects this year reached 26.9 trillion won as of end-September.

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