Seoul: Samsung Electronics Co. has announced a significant 21 percent increase in its net profit for the third quarter, driven by the strong performance of its semiconductor division amid the booming artificial intelligence (AI) industry. The company reported a net profit of 12.22 trillion won (US$8.6 billion) for the July-September period, compared to 10.1 trillion won in the same period last year, as disclosed in a regulatory filing.
According to Yonhap News Agency, Samsung's operating profit surged 32.5 percent year-on-year to 12.16 trillion won, while revenue rose by 8.8 percent to 86.06 trillion won. The earnings exceeded market expectations, with analysts predicting an average net profit of 10.13 trillion won, based on a survey by Yonhap Infomax.
The semiconductor division reported a record operating profit of 7 trillion won, a substantial increase from 400 billion won in the previous quarter and 3.9 trillion won in the third quarter of 2024. This growth was attributed to the strong performance of high bandwidth memory (HBM) products. Samsung stated that its memory business achieved record-high quarterly revenue by expanding HBM3E sales and addressing strong demand across all applications.
Samsung also highlighted the success of its foundry business, which recorded record-high customer orders during the quarter. The company's DX division, encompassing mobile, TV, and home appliance businesses, achieved an operating profit of 3.5 trillion won, bolstered by the popularity of foldable smartphones. Within this division, the mobile sector posted an operating profit of 3.6 trillion won, thanks to the successful launch of the Galaxy Z Fold 7 and increased sales of tablets and wearables.
However, Samsung's visual display arm faced challenges, posting an operating loss of 100 billion won due to intensified competition. Looking ahead, Samsung anticipates the AI boom to continue benefiting its chip and smartphone businesses in the fourth quarter. The company plans to capitalize on demand from the AI industry with HBM3E, high-density eSSDs, and other advanced memory products. Additionally, Samsung aims to expand its mobile product sales through its premium lineup, including tablets and wearables.
Samsung's conference call revealed that the company has already secured customers for next year's HBM production. An official stated that the company is conducting an internal review to expand HBM production capacity due to increasing demand from clients. Samsung estimates its annual facility investment for this year to reach 47.4 trillion won, with the semiconductor division accounting for 40.9 trillion won. The investment is aimed at transitioning to advanced processes for high-value-added products and upgrading current production lines.
The company's accumulated investment in research and development projects reached 26.9 trillion won as of the end of September. Meanwhile, shares of Samsung Electronics were trading at 104,800 won at 11:09 a.m., reflecting a 4.28 percent increase from the previous session, following the release of the third-quarter report after the market opened.