Samsung Forecasts Soaring Operating Profits in Q3, Promising Robust Performance

Samsung Electronics reported a massive jump in third-quarter profits today, beating market expectations as memory chip prices continue to climb. The South Korean tech giant expects operating profits of 12.1 trillion won ($8.5 billion) - a 32% increase from last year and the highest quarterly profit since mid-2022.

The results came in 17.4% higher than what economists predicted, according to a Yonhap survey. Analysts point to rising memory chip prices as the main driver behind Samsung's strong performance.

This marks a significant turnaround for Samsung's semiconductor business, which struggled through a brutal downturn in 2022 and early 2023. Memory chip prices crashed as demand for smartphones and computers dropped, forcing the company to cut production and delay some investments.

But the chip market has been recovering this year. Growing demand for artificial intelligence applications is pushing up prices for high-end memory chips. Data centers need more powerful chips to run AI workloads, and that's creating new opportunities for memory makers like Samsung.

For investors, these numbers suggest the worst of the chip downturn is behind us. Samsung's memory division typically accounts for most of the company's profits, so when chips do well, the whole company benefits. The stock has already gained about 20% this year as investors bet on a chip recovery.

Samsung said these figures are preliminary. The company will release detailed financial results later this month, which should give a clearer picture of how different business units performed and what management expects for the fourth quarter.