SEOUL, South Korea — Demand for AI memory chips pushed Samsung Electronics to an operating profit of 107.4 trillion won in the third quarter. The company says no tech firm had ever earned more than 100 trillion won in a quarter before.
Sales hit 195.3 trillion won, a record for the second quarter running. They rose 14% from April through June.
Nearly every won of profit came from chips. Samsung’s Device Solutions division booked 106.5 trillion won in operating profit, and its sales climbed 15% from the prior quarter to 147.1 trillion won.
Phones, TVs and appliances lost money. The Device eXperience division lifted revenue 8% from the second quarter but still ran an operating loss of 0.8 trillion won.
Memory sets new highs
Memory revenue and operating profit both reached all-time quarterly highs. Factories were running near their limits, so Samsung said it prioritized AI products. Server buyers kept ordering, and prices rose for every type of application.
HBM4 sales grew sharply. Samsung put that down to the product’s industry-leading competitiveness, and it also stepped up shipments of server SSDs as orders grew.
The company expects the fight for AI leadership to keep tech firms spending on infrastructure through the end of the year. New CPU and GPU platforms should drive memory demand, it said, while personal AI agent services push up orders for QLC SSDs.
Samsung plans to sell more HBM, server DRAM and SSDs in the fourth quarter. It also wants to ship more high-speed server DDR5 and QLC SSDs.
Its 2027 outlook is even stronger. Samsung predicts AI infrastructure spending will reach a historic level next year and that AI-driven demand will far outrun industry supply compared with 2026. To lock in steady sales, it is seeking multiyear contracts.
Foundry and chip design
The contract manufacturing business made notable gains in both revenue and earnings. Sales of HBM base dies and advanced-node products rose, and orders kept coming from 2nm high-performance computing customers, among them major hyperscalers.
Foundry is aiming for double-digit revenue growth this quarter. New mobile products, more output of 4nm NPUs and higher memory product sales are expected to help.
In 2027, Samsung expects its 4nm and 2nm nodes to lead growth as AI and high-performance computing demand stays strong. Its new fab in Taylor, Texas, is due to start operating next year and will add to global supply.
System LSI, the chip design unit, grew revenue by mass-producing systems-on-a-chip and image sensors for new models launched in the second half. New customer partnerships won it custom chip projects.
The unit expects stable production and sales of flagship systems-on-a-chip and 200-megapixel image sensors this quarter. Next year, it wants faster sales of its flagship high-resolution sensors and a move into non-mobile markets.
Phones, TVs and displays
Samsung’s mobile and networks businesses brought in 37.7 trillion won but lost 0.6 trillion won. New flagship phones, foldables among them, lifted revenue from both the previous quarter and a year earlier.
A better mix of flagship sales improved earnings from the second quarter. Cost pressures left them below last year’s level.
For the holiday rush, Samsung is relying on the Galaxy S26 series, the Galaxy Z Fold8 Ultra, the Z Fold8 and new ecosystem products. It plans to tighten efficiency across the business to protect margins.
Networks earned less than in the prior quarter and a year ago. North American sales slipped, as did sales of high-margin software. The unit aims to secure profitability this quarter by growing revenue in North America, South Korea and Japan.
TVs and home appliances generated 13.9 trillion won in revenue and lost 0.2 trillion won. TV sales fell once major sporting events wrapped up, and higher costs ate into earnings. Samsung expects TV demand to stay flat or slip slightly next year.
Appliance earnings dropped as raw material and logistics costs climbed. That happened even with stronger marketing in South Korea and growth in business-to-business sales and subscriptions.
Harman sold more audio and automotive products and improved its earnings. One-time U.S. tariff refunds added to the gain.
Samsung Display earned 1.1 trillion won on 8.0 trillion won in revenue. Smaller panels benefited from steady demand for high-end phones, and gaming monitors drove growth in larger screens.
Year-end demand and new launches should help the display unit this quarter, though it expects external factors to limit any earnings gain. It sees weak demand continuing in 2027.
Spending and shareholder returns
Samsung spent 29 trillion won on capital projects in the quarter, 27.2 trillion won of it on chips. The total rose by 12.2 trillion won from the second quarter and by 19.8 trillion won from a year earlier.
For the full year, it expects to spend about 84.4 trillion won, with 76.8 trillion won going to semiconductors. New fabs and other infrastructure are planned to keep up with AI and high-performance computing demand.
Shareholders will receive a third-quarter dividend of 4,601 won per common and preferred share, or 30 trillion won in total.
Samsung puts its 2026 shareholder returns at 90 trillion to 110 trillion won. About 35 trillion won is already planned or paid, leaving 55 trillion to 75 trillion won.
Most of that balance will go to a large program to buy back and cancel shares, with dividends making up the rest. Investors have been watching the gap between Samsung’s common and preferred share prices, and the company said it will consider buying back a bigger share of preferred stock depending on market conditions.
The board will settle the final 2026 payout and the next shareholder return policy at a meeting in late January 2027.
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