The global AI boom is driving strong earnings for Samsung Electronics, but concerns over its shareholder-return plans and a less optimistic supply outlook have unsettled investors. The company reported a 15-fold rise in quarterly chip profit on Thursday, yet its shares fell as much as 6.2% during morning trading. Rival SK Hynix rose 0.7%.
Samsung reported operating profit of 107.4 trillion won ($80 billion) for July to September, up from 12.2 trillion won a year earlier and in line with its estimate. Its semiconductor division earned 106.5 trillion won, accounting for almost all of the group’s profit, but falling slightly below analysts’ estimate of 107.3 trillion won, according to LSEG.
Investor expectations rose after SK Hynix reported better-than-expected results and announced plans to return about $75 billion to shareholders this year. Samsung, however, deferred its next shareholder-return policy decision until January. Its previously announced returns for this year total between 90 trillion and 110 trillion won, including 30 trillion won in third-quarter dividends.
“SK Hynix did quite a lot more than expected yesterday … it went beyond market expectations, but Samsung Electronics hasn’t really changed anything from the guidance it gave before,” said Lee Min-hee, analyst at BNK Investment & Securities.
AI chip shortage expected to continue
SK Hynix said its DRAM and high-bandwidth memory (HBM) chips were sold out through 2029, with shortages expected to continue until 2030. Samsung said its HBM supply for next year was also sold out, with key customers seeking additional chips for AI data centres.
“In 2027, the (memory) business expects AI infrastructure capital expenditure to reach a historic level as the AI ecosystem expands,” Samsung said. “Increasing AI-driven demand will far exceed the industry supply in comparison with 2026.”
Samsung expects the chip market to remain tight through 2028. Its chip division’s capital spending rose 62% to 76.8 trillion won this year, with further investment planned for next year. The company said building new fabrication plants would take time.
Analysts said Samsung’s outlook appeared less optimistic than SK Hynix’s. “The market appeared to expect an additional buyback and/or dividend announcement, but the company deferred the decision until late January, potentially disappointing near-term expectations,” said CLSA senior analyst Sanjeev Rana.
Long-term contracts and manufacturing plans
Samsung has signed long-term supply contracts with 10 major customers and is negotiating with another 10. It aims for these agreements to cover 60% to 70% of its production capacity by 2030, extending beyond AI companies to mobile and automotive customers.
Its foundry business remains loss-making, although Samsung reported improved revenue from logic dies for HBM chips and new orders for advanced 2-nanometre chips. Mass production at its Texas plant is planned for next year, including chips for Tesla. The company is also considering another advanced-chip factory.
Higher memory costs pushed Samsung’s mobile business into an 800 billion won loss. Concerns about AI infrastructure financing and competition from China continue to weigh on chip stocks. Alphabet also reported a sharp acceleration in cash spending as it expanded its AI infrastructure.
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