Samsung Q3 Profit Surges Nearly Ninefold as AI Memory Shortage Set to Deepen in 2027
By Julian Parker | October 28, 2026
Key Takeaways
- Samsung reported record third-quarter operating profit of KRW 107.4 trillion and revenue of KRW 195.3 trillion, supported by strong AI memory demand.
- Management expects AI-related memory demand to outpace supply more sharply in 2027, with HBM, server DRAM, and SSDs remaining central to growth.
- Planned 2026 capital expenditure of KRW 84.4 trillion focuses on production expansion, manufacturing execution, and future investment returns.
Record Earnings Driven by Semiconductor Demand
Samsung Electronics announced record third-quarter results on October 29, driven by the increasing demand for memory used in artificial intelligence infrastructure. The operating profit reached KRW 107.4 trillion, approximately 8.8 times higher than the previous year, while revenue rose 14% from the previous quarter to KRW 195.3 trillion.
The results highlight Samsung's reliance on AI computing expansion, as cloud infrastructure requires advanced processors and substantial memory capacity, boosting demand for high-bandwidth memory (HBM), server DRAM, and enterprise storage.
The Device Solutions division, which encompasses semiconductor operations, generated revenue of KRW 147.1 trillion and an operating profit of KRW 106.5 trillion, accounting for about 99% of the group's total earnings.
Outlook for AI Memory Supply Gap in 2027
Samsung's management anticipates a continued shortage in AI memory availability next year, predicting that global AI infrastructure capital expenditure will reach a record in 2027. They expect AI-related memory demand to exceed industry supply by a greater margin than in 2026, indicating sustained growth beyond the current infrastructure deployment wave.
The company plans to expand sales of HBM, server DRAM, and SSDs while pursuing multi-year supply agreements to enhance visibility into customer requirements and better plan production investments.
Growth Drivers: HBM4 and Server Storage
Samsung identified the expansion of HBM4 sales and strong server SSD demand as key contributors to its quarterly performance. HBM is crucial for high-speed data transfer alongside advanced AI processors, while server DRAM and SSDs cater to different requirements within AI infrastructure.
Management expects the rise of personal AI agent services to further increase demand for QLC SSDs, designed for substantial data storage.
Investment Plans and Manufacturing Expansion
Samsung plans a full-year capital expenditure of approximately KRW 84.4 trillion for 2026, with KRW 76.8 trillion allocated to its semiconductor division. This investment aims to support new fabrication facilities and infrastructure to meet AI and high-performance computing demand.
The timing of this expansion is critical; strong demand could lead to revenue growth, while a slowdown in customer spending or rapid competitor supply expansion could negatively impact pricing conditions.
Foundry Business Growth Opportunities
Samsung's foundry business presents another opportunity to capitalize on AI infrastructure spending, with expectations of double-digit revenue growth in the fourth quarter. Plans to expand through advanced 4nm and 2nm manufacturing processes are set for 2027, enhancing its manufacturing footprint.
However, successful execution in advanced manufacturing is essential, as customer adoption rates and production efficiency will influence earnings contributions from new projects.
Conclusion
While Samsung's record quarter underscores a robust AI memory growth narrative, performance across its broader operations was mixed. The Device eXperience division reported an operating loss despite revenue growth, highlighting the disparity between semiconductor profitability and consumer business pressures.
Future developments to watch include HBM4 shipment growth, server memory pricing, and the execution of long-term contracts, as Samsung navigates the evolving landscape of AI memory demand into 2027.