The world's largest memory-chip maker is expected to report third-quarter operating profit of about 106.1 trillion won ($79.1 billion) for the July-to-September period, according to the LSEG SmartEstimate, based on forecasts from 21 analysts.
That would represent an almost nine-fold increase from the 12.17 trillion won recorded in the same quarter a year earlier and mark Samsung's fourth consecutive quarter of record operating profit.
Yet the scale of the expected increase masks growing uncertainty in the semiconductor market. Analysts have reduced their average forecast by 7.7% since the end of August, reflecting concerns that the extraordinary rise in memory-chip prices may be losing momentum.
Samsung is scheduled to release preliminary third-quarter results on Thursday, with detailed financial figures expected later in October.
AI boom keeps memory market tight
The semiconductor industry has been riding a powerful wave of demand from the rapid expansion of artificial intelligence.
Technology companies are investing billions of dollars in data centres and advanced computing infrastructure, creating enormous demand for high-performance memory chips needed to run AI systems.
The resulting supply shortage has lasted for more than a year, and chipmakers expect tight conditions to continue into next year and potentially through 2028.
The boom has transformed the fortunes of the world's biggest memory producers, including Samsung, SK Hynix and Micron. All three have benefited from rising prices and strong demand, recording significant improvements in profits and margins.
But investors are increasingly focused on whether the extraordinary growth can continue.
Memory-chip prices continued to rise in the third quarter, but at a slower pace. That has raised concerns that margins may have reached their peak and that the huge wave of AI-related spending could eventually moderate.
TrendForce expects conventional DRAM contract prices to increase between 10% and 15% in the fourth quarter compared with the previous three months. That would represent a sharp slowdown from the roughly 60% increase recorded in the second quarter.
“Although the market remains in a tight supply position, the pace of price growth is expected to decelerate,” said Avril Wu, TrendForce's senior vice president for research.
Wu said chip suppliers were becoming increasingly cautious about imposing further large price increases because of the potential impact on demand for smartphones, computers and other consumer electronics.
“In addition, long-term agreements represent an increasingly higher proportion of suppliers' total output. With ceiling-price mechanisms built in, the rate of price increases has slowed down,” Wu said.
Rising costs put pressure on customers
The semiconductor boom is also creating problems further down the technology supply chain.
Higher memory-chip prices have increased production costs for smartphone makers and consumer-electronics manufacturers, potentially weakening demand at a time when consumers are already facing higher prices for many technology products.
Long-term supply agreements are also changing the way prices are negotiated. Chipmakers are increasingly agreeing to contracts that guarantee customers a supply of components in return for limits on how much prices can rise.
Samsung said in July that it was targeting long-term agreements covering about two-thirds of its memory-chip production, part of an effort to reduce its exposure to the industry's traditional boom-and-bust cycles.
The strategy could provide greater revenue visibility but may also limit the extent to which Samsung and its rivals can benefit from further price increases.
US-based Micron has warned that the semiconductor market could be even tighter in 2027 and 2028 than it is this year. The company nevertheless expects its gross margin to decline slightly in the current quarter, to 86.3% from 87%, partly because of higher employee compensation costs.
For Samsung, analysts expect its memory-chip operating margin to reach 76% in the third quarter, unchanged from the previous quarter, according to estimates from SK Securities analyst Han Dong-hee.
Chinese competition grows
Samsung is also facing increasing competition from Chinese chipmakers.
Chinese manufacturers remain more concentrated in lower-end memory products, but the global shortage has created opportunities for them to expand their presence as customers search for additional sources of supply.
“Our industry checks indicate that an increasing number of OEMs and ODMs are adopting Chinese DRAM and NAND,” said Kinngai Chan, a senior research analyst at Summit Insights Group.
The trend represents another challenge for Samsung, which must defend its market position while investing heavily in the advanced technologies driving the next phase of the AI boom.
Stronger won creates another headwind
Currency movements are adding to the pressure.
The South Korean won strengthened 14.3% against the US dollar during the third quarter, rebounding sharply from 17-year lows. It was the currency's biggest quarterly gain since early 1998.
A stronger won can reduce the value of Samsung's overseas earnings when they are converted back into the South Korean currency, creating a potential drag on reported profits even when its international operations remain strong.
Samsung's shares have also pulled back from their recent peak, falling about 25% from a June record. Despite that decline, the stock remains more than twice its level at the beginning of the year, reflecting investor optimism over the company's exposure to AI-related semiconductor demand.
Samsung closes gap in AI memory
One of the most closely watched areas of Samsung's business is high-bandwidth memory, or HBM, a specialized type of chip that has become essential for AI data centres.
Samsung had previously fallen behind rival SK Hynix after delays in qualifying some of its products for use by Nvidia, one of the world's largest AI-chip companies.
The South Korean electronics giant has sought to close that gap by increasing shipments of its latest HBM4 chips.
J.P. Morgan estimates that Samsung's share of the HBM market will rise to 34% this year, up from 20% last year. SK Hynix's share, meanwhile, is projected to decline to 46% from 60%.
The shift would represent a significant improvement for Samsung as it seeks to capitalize on one of the fastest-growing segments of the semiconductor industry.
Still, the broader outlook remains dependent on whether AI-related investment can continue at its current extraordinary pace.
For now, Samsung's expected profit surge demonstrates just how powerful the AI boom has become for the global memory-chip industry. But the downward revisions to analysts' forecasts, slowing memory-price growth, stronger currency and intensifying competition suggest the company may be entering a more challenging phase of the cycle.
Thursday's preliminary results will therefore offer investors an important early indication of whether Samsung's AI-driven semiconductor boom still has room to run.