Samsung Electronics Co. profit rebounded as its flagship semiconductor arm reported a bigger-than-expected 80% surge, suggesting booming demand for artificial intelligence is helping drive a recovery.
The world’s largest maker of memory chips and smartphones said Thursday that semiconductor profits bounced back after four straight quarters of declines, signaling a comeback as it tries to catch up with rivals in the advanced AI race.
The semiconductor unit, which has major operations the Austin area, said it will focus next year on mass production of the next generation of high-bandwidth memory or HBM4 — designed to work in tandem with AI accelerators from Nvidia Corp.
Samsung echoed the prediction from SK Hynix Inc. — a major competitor it’s trying to catch up with — that a spending spree in artificial intelligence will persist this quarter and into next year. U.S.-based Micron Technology Inc. has also been surging ahead in recent quarters.
“The semiconductor market is expected to remain strong, driven by ongoing AI investment momentum,” Samsung said in a statement.
It set a new high in quarterly revenue, which was up nearly 9% to $60.4 billion in the July-September period.
Samsung’s operating profit of $8.6 billion marked a 160% increase from the previous quarter, when it said its semiconductor earnings were weighed down by inventory value adjustments and one-off costs related to technology export restrictions on China. Its semiconductor division posted $4.89 billion in operating profit.
The company said an advanced version of its high-bandwidth memory chips, the HBM3E, is “currently in mass production and being sold to all relevant customers,” while samples of its next-generation product, the HBM4, are being shipped to key clients.
Its shares climbed 3.6% in Seoul.
This is a developing story. Please check back for updates.