Samsung Electronics expects to report a record operating profit of about 107.4 trillion won (about US$80 billion) for the three months to the end of September, thanks to soaring demand for memory chips used in artificial intelligence.

The numbers

  • A profit roughly nine times higher than in the same quarter last year
  • The company's fourth record quarter in a row
  • Full third-quarter results are due at the end of October. These are preliminary estimates.

What is driving it

Samsung is one of the world's biggest makers of memory chips, alongside SK Hynix and Micron. These chips are essential for the AI data centres being built by companies such as Nvidia, Google, Amazon and Meta. Those three tech giants alone have pledged more than US$650 billion for AI projects this year.

Samsung also got a boost from its latest foldable phones, launched in August, and its S26 smartphones.

Samsung's stock market value passed US$1 trillion earlier this year. In June, South Korea unveiled plans for at least US$880 billion in chip-making projects led by Samsung and SK Hynix.

The catch for consumers

The AI boom has a downside for ordinary buyers. Chip makers are prioritising high-value AI products, which has caused a shortage of memory for everyday devices. Samsung and other makers have raised prices, making smartphones and computers more expensive.

What it means in Kenya

Samsung is one of the most popular phone brands in Kenya. Higher memory prices could reach Kenyan shops as:

  • higher prices for new smartphones, laptops and tablets
  • more expensive upgrades for businesses and schools buying computers
  • slower price cuts on budget phones

For buyers planning a new phone or laptop, prices may not come down any time soon while the AI race continues.