Samsung Electronics has delivered a stunning earnings outlook for the third quarter of 2026, with its operating profit expected to cross the KRW 100 trillion mark for the first time. The company’s latest earnings guidance shows how strongly the ongoing artificial intelligence boom is benefiting the semiconductor business, particularly the memory chip segment.
At the same time, Samsung’s smartphone business is facing a very different situation. Rising memory and semiconductor prices are putting pressure on the profitability of Galaxy smartphones, with a new report suggesting that Samsung could reduce smartphone production by up to 30% in the fourth quarter.
Samsung Q3 2026 Earnings Guidance Revealed
Samsung Electronics has announced its preliminary earnings guidance for the July-September quarter of 2026. The company expects consolidated sales of approximately KRW 195 trillion, while operating profit is estimated at around KRW 107.4 trillion.
The figures represent a major improvement from the previous quarter. Samsung recorded KRW 171.5 trillion in consolidated sales and KRW 89.49 trillion in operating profit during Q2 2026.
Compared with the same quarter last year, the difference is even more dramatic. Samsung reported KRW 86.06 trillion in sales and KRW 12.17 trillion in operating profit in Q3 2025.
According to Samsung, the Q3 2026 guidance represents a 126.59% year-over-year increase in sales and a massive 782.5% jump in operating profit.
AI Boom Is Driving Samsung’s Record Profit
The biggest reason behind Samsung’s extraordinary Q3 performance is the continued expansion of artificial intelligence infrastructure.
AI data centers require enormous quantities of memory and advanced semiconductor components. As technology companies continue investing heavily in AI computing infrastructure, demand for memory chips has increased sharply.
This has created a favorable environment for Samsung’s semiconductor business. Higher memory prices and strong demand for AI-related chips have helped the company generate significantly higher earnings from its chip operations.
Reuters reported that high-bandwidth memory and broader memory demand have been among the key drivers behind Samsung’s record quarterly profit.
Samsung’s latest numbers also highlight an unusual situation inside the company: the semiconductor business is benefiting from higher memory prices, while businesses that purchase those components, including smartphones, are facing higher manufacturing costs.
Samsung Smartphone Business Faces Rising Component Costs
While Samsung’s overall financial performance is exceptionally strong, its smartphone business is reportedly under increasing pressure.
A South Korean report from MoneyToday claims that Samsung’s Mobile eXperience (MX) division has asked suppliers to reduce production volumes for the fourth quarter by around 20% to 30%.
The reported move is linked to rapidly increasing memory prices. According to the report, the cost of smartphone LPDDR5X memory has risen sharply as AI-related demand puts additional pressure on the global memory supply chain.
This creates a challenging situation for Samsung. The company is benefiting from expensive memory chips through its semiconductor business, but its smartphone division has to pay more for the same components when manufacturing Galaxy devices.
An industry source cited by MoneyToday said that rising memory and semiconductor costs have made it increasingly difficult for Samsung to generate profit from smartphones at current prices.
Why Samsung Could Cut Smartphone Production
Reducing smartphone production may appear surprising considering Samsung remains one of the world’s largest smartphone manufacturers. However, the decision could be aimed at protecting margins rather than simply increasing shipment numbers.
When component costs rise significantly, producing more devices does not necessarily translate into higher profits. If the additional cost of memory, processors and other components cannot be passed on to consumers, smartphone margins can become extremely thin.
Samsung therefore appears to be facing a two-sided impact from the memory market. Its semiconductor business can benefit from higher memory prices, while the Mobile Experience division has to deal with those same higher component costs.
A previous report also indicated that smartphone memory procurement costs had risen substantially during 2026, further highlighting the pressure being placed on Samsung’s mobile business.
Samsung Q3 2026 vs Q2 2026 vs Q3 2025
| Period | Sales | Operating Profit |
|---|---|---|
| Q3 2026 | KRW 195 trillion | KRW 107.4 trillion |
| Q2 2026 | KRW 171.5 trillion | KRW 89.49 trillion |
| Q3 2025 | KRW 86.06 trillion | KRW 12.17 trillion |
The comparison makes the scale of Samsung’s latest performance clear. Revenue increased 13.7% sequentially from Q2, while operating profit rose 20%. On a year-over-year basis, operating profit jumped more than sevenfold.
Samsung Q3 2026 Results: When Will the Final Numbers Be Released?
The figures announced on October 8 are preliminary earnings guidance, rather than Samsung’s complete quarterly financial results.
Samsung has scheduled its Q3 2026 earnings conference call for October 29, 2026, at 10:00 a.m. Korea Standard Time. The company is expected to provide a more detailed breakdown of its business performance at that time.
The final results should provide more information about how much of Samsung’s record profit came from the memory business and how severely rising component prices affected its smartphone and other consumer-facing divisions.
What Samsung’s Q3 Performance Means for the Smartphone Market
Samsung’s latest earnings highlight a broader shift taking place across the technology industry.
AI infrastructure is increasing demand for advanced memory at a time when smartphone manufacturers also need large volumes of RAM and storage components. As semiconductor companies prioritize higher-margin AI-related products, conventional electronics manufacturers can face higher component costs.
This could eventually affect smartphone prices, product volumes and profit margins across the industry.
For Samsung, the contrast is particularly interesting because the company operates on both sides of the semiconductor supply chain. Its memory business can benefit from the AI-driven demand surge, while its smartphone division must manage the resulting increase in component expenses.
Bottom Line
Samsung Electronics is heading toward what could become its strongest quarterly financial performance yet. The company expects KRW 107.4 trillion in Q3 2026 operating profit, supported by booming demand for memory chips and the continued expansion of AI infrastructure.
However, the record semiconductor performance comes with a challenge for Samsung’s smartphone business. Rising memory costs are reportedly squeezing Galaxy smartphone margins and could lead to a significant reduction in production during Q4 2026.
The company’s detailed earnings report on October 29 will therefore be important not only for understanding Samsung’s record profit, but also for seeing how the AI-driven semiconductor boom is affecting its smartphone business.
(Source)
