Samsung Electronics reported a sharp increase in quarterly profit, with operating profit in its chip division rising 49-fold year-on-year. The results reflect growing demand linked to artificial intelligence, which is also affecting supply conditions in the memory market.
Record Quarterly Gains
Operating profit in the chip division increased from 1.1 trillion won to 53.7 trillion won over the past year, accounting for 94% of the total quarterly profit of 57.2 trillion won. These results reflect the role of memory chips in supporting infrastructure related to AI and data processing.
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Widening Supply-Demand Gap In Memory Chips
Kim Jaejune said current production capacity remains below demand levels. Forecasts extending to 2027 indicate that the gap between supply and demand may widen further as requirements for high-performance chips increase, particularly in AI data centres.
Securing Supply Amid AI Investment
In response, Samsung has entered into multi-year agreements with key customers to secure supply. At the same time, production capacity is being directed toward advanced chips used in AI systems, including those developed by Nvidia.
Production Risks And Strategic Adjustments
The company is also preparing for potential disruptions related to labour activity in South Korea, particularly within its semiconductor operations. Measures have been introduced to maintain production continuity, while capital expenditure is expected to increase to support demand from AI-related applications.
Impact On Broader Business Segments
Higher component costs have affected other business units. The mobile division recorded a 35% decline in profit, while operating profit in the display segment decreased by 20%, reflecting the impact of rising input costs.
