Samsung set to beef up advanced chip output after memory chip sales hit record

SEOUL: Samsung Electronics reported its memory chip revenue hit a record high in the third quarter and said it will focus on mass producing its most advanced products next year, expecting continued strength in the chip market, driven by AI demand.

The turnaround of the world’s top memory chipmaker reflects the unexpected boom in conventional chip prices, with supply squeezed by the industry’s shift to producing advanced AI chips, while demand is rising for data centres.

At the same time, Samsung said on Thursday its current-generation HBM3E chips are being sold to “all related customers,” suggesting it has joined rivals like SK Hynix in supplying the latest 12-layer HBM3E chips to artificial intelligence chip leader Nvidia.

Samsung shares rose as much as 5.3 percent after the results, sharply outpacing a 0.9 percent gain in the benchmark KOSPI.

Samsung’s chip business, its main cash cow, posted an operating profit of 7 trillion won (USD4.92 billion) in the third quarter, up 80 percent from a year earlier. Its memory chip business reported record revenue of 26.7 trillion won, up from 22.3 trillion won a year ago.

“The semiconductor market is expected to remain strong, driven by ongoing AI investment momentum,” Samsung said in a statement.

The world’s largest maker of memory chips posted 12.2 trillion won in operating profit for the July to September period, in line with its estimate of 12.1 trillion won.

“Looking ahead to Q4, the rapid growth of the AI industry is expected to open up new market opportunities,” Samsung said.

The recent boom in commodity chip sales has been a boon to the South Korean chip giant which has been slow to capitalise on soaring demand for AI chips that benefited its rivals like SK Hynix, a key supplier to Nvidia for its chipsets.

Investors are looking for signs that Samsung is narrowing the gap with SK Hynix with the next-generation HBM4 chips.