Samsung Electronics Co. Ltd. (OTC:SSNLF) forecast a record $80 billion quarterly operating profit on Thursday as AI demand sent memory chip prices soaring. But those same price increases are pushing its smartphone business deeper into losses.
Meritz Securities estimates Samsung’s memory business earned 109 trillion won ($81.4 billion) in operating profit, more than the 107.4 trillion won Samsung expects to earn across the entire company, as losses elsewhere dragged down the total.
Samsung expects operating profit to jump 783% to 107.4 trillion won ($80.2 billion), slightly ahead of expectations, according to its preliminary earnings guidance.
How AI Is Pulling Samsung in Two Directions
Samsung makes both memory chips and the smartphones that use them. But the AI boom has sent those two businesses in opposite directions.
AI data centers are buying enormous amounts of memory, encouraging chipmakers to prioritize more profitable server products. That has pushed up prices across the industry, making Samsung’s chips hugely profitable to sell but increasingly expensive for its smartphone business to buy.
Samsung’s own figures show the problem. In the first half of 2026, its chip business was selling memory at more than three times its average 2025 price. But its smartphone division was also paying more than three times as much for the memory it needed.
Smartphone Losses Mount Despite Market Lead
Samsung’s mobile and networks division lost 700 billion won ($523 million) in the second quarter. Meritz estimates the loss widened to 1.8 trillion won ($1.3 billion) in the third.
Yet Samsung’s smartphones are selling well. The company led the global market in the second quarter with a 23% share, while shipments rose 9% from a year earlier, according to Counterpoint Research.
The pressure appears to be reaching prices and production. Samsung raised the U.S. price of its base Galaxy S26 to $999 this month, $200 above its predecessor’s launch price. It also asked suppliers to cut fourth-quarter component deliveries by 20% to 30%, MoneyToday reported, although seasonal slowing also played a role.
On Polymarket, traders assign just a 6% probability to an AI industry downturn by Dec. 31, under the market’s specific criteria. A slowdown in AI spending could hurt Samsung’s memory profits while easing smartphone costs.
Samsung shares closed down 2.42% in Seoul despite the record guidance. The company will release detailed divisional results on Oct. 29.
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