Samsung’s chip arm earned 99% of a record KRW 107.4 trillion quarterly profit

Samsung Electronics reported KRW 107.4 trillion in operating profit for the third quarter of 2026, on record revenue of KRW 195.3 trillion, according to its official results announcement. The company says it is the first tech company to pass KRW 100 trillion in quarterly operating profit.

Revenue rose 14% from the previous quarter. Samsung attributes the result to AI-driven demand for memory chips, which pushed prices up across all applications.

Memory chips carry almost the whole profit

The Device Solutions (DS) Division, which houses the chip businesses, posted KRW 147.1 trillion in revenue and KRW 106.5 trillion in operating profit. That is roughly 99% of the group’s total operating profit, and the group’s operating margin works out to about 55% (our calculation from the reported figures).

Samsung says its Memory Business set an all-time quarterly high for both revenue and operating profit while working under capacity constraints. It reports that it “significantly scaled up” sales of HBM4, the high-bandwidth memory used next to AI accelerators, and met growing demand for server SSDs. The foundry unit improved on higher sales of HBM base dies and advanced nodes, and it keeps winning orders for 2nm chips from high-performance computing customers, including major hyperscalers. The System LSI unit grew on new phone chips and image sensors, and it signed new custom-chip customers.

The rest of the group looked very different. The Device eXperience (DX) Division lost KRW 0.8 trillion. Within it, mobile and networks together lost KRW 0.6 trillion on KRW 37.7 trillion in revenue, and TVs and appliances lost KRW 0.2 trillion on KRW 13.9 trillion. Samsung blames cost pressures for the phone result and higher raw material and logistics costs for appliances. Samsung Display earned KRW 1.1 trillion on KRW 8.0 trillion in revenue.

Spending of KRW 84.4 trillion to chase AI demand

Samsung put KRW 29 trillion into capital expenditure in the quarter, KRW 12.2 trillion more than in the second quarter. Of that, KRW 27.2 trillion went to the DS Division. The company expects about KRW 84.4 trillion for the full year, KRW 76.8 trillion of it for DS, mainly new fabs and infrastructure. Since KRW 56.9 trillion was spent through September, that implies roughly KRW 27.5 trillion in the final quarter (our arithmetic).

On shareholder returns, the third-quarter dividend is KRW 4,601 per common share and the same per preferred share, about KRW 30 trillion in total. Samsung estimates total 2026 returns at KRW 90 trillion to 110 trillion, with a large buyback and cancellation program still to come. It says it will weigh the share of preferred stock in that program, given market interest in the price gap between the two share classes. Final decisions are due at a board meeting in late January 2027.

A run of records that is widening the gap inside Samsung

The announcement fits a steep trend. Samsung’s own second-quarter release put revenue at KRW 171.5 trillion and operating profit at KRW 89.5 trillion, according to a Korea Times report on that quarter, up from 1,814% year on year in profit, per the same coverage. Against that base, operating profit grew about 20% in one quarter (our calculation). The previous record, before the second quarter, was KRW 57.2 trillion in profit, according to the same coverage.

The split is the other half of the story. The second quarter’s phone and network unit was already reported at an operating loss, and the third quarter shows the pattern continuing. The consumer businesses that made Samsung a household name are now absorbing cost pressure while memory, the part sold to AI data center builders, earns the money. Samsung’s 2027 plans reflect this: it expects AI infrastructure spending to reach a historic level and AI-driven demand to far exceed industry supply, and it is seeking multi-year contracts to lock in sales. Those are the company’s own projections, and the announcement gives no volume or price figures behind them.

Display is more cautious. Samsung Display expects continued market demand weakness in 2027, and the TV business expects demand to be flat or slightly lower.

What the announcement does not settle

The release is unaudited company reporting and gives no breakdown of memory profit by product, so HBM4’s share of the record cannot be separated from price increases on ordinary DRAM and SSDs. It also gives no 2027 profit guidance, and the buyback size is undecided. Harman’s earnings were helped by one-time U.S. tariff refunds, which Samsung flags as non-recurring. Investors will look to the January board meeting for the return plan, and to the fourth quarter, where Samsung expects its foundry revenue to grow by double digits and its phone unit to push flagship sales, including the Galaxy S26 series and Z Fold8 models.