AI-driven chip demand remains strong, but record earnings raise the bar for semiconductor stocks.

  • Samsung expects its strongest-ever quarterly operating profit in Q3.
  • TSMC’s third-quarter revenue jumped 50%, underscoring continued strength in AI-related chip demand.
  • Retail sentiment was ‘bearish’ for MU and TSM on Thursday.

Samsung Electronics’ record third-quarter forecasts weighed on shares of competitors Micron Technology (MU) and Taiwan Semiconductor Manufacturing early Thursday, even as TSMC posted healthy sales growth for September.

Samsung projected its quarterly operating profit for July through September would top 100 trillion won, a ​world first for a technology company. The company said operating profit is likely to be 107.4 trillion won, equivalent to $80.18 billion. Samsung will issue its full results on October 29.

Close on the heels of Samsung’s report, TSMC said its September sales rose 54.6%, taking third-quarter sales 50% higher to 1.49 trillion won.

MU slipped nearly 1% in overnight trading ahead of Thursday, while U.S.-listed shares of TSMC dipped 0.3%. Samsung’s stock ended 2.4% lower in Seoul. Samsung competes with Micron in memory chips such as DRAM and HBM, while it competes with TSMC in semiconductor foundry services.

Samsung Signals Record Q3 Performance

Samsung’s operating profit forecast topped analysts' estimate of 106.1 trillion won, according to LSEG SmartEstimate cited by Reuters, and would mark Samsung’s fourth consecutive quarter of record operating profit. It also exceeds the roughly 89 trillion won record set in the second quarter.

Revenue is expected to more than double year over year to a record 195 trillion won, Samsung said, although the figure fell short of a FactSet consensus estimate of 206.8 trillion won cited by The Wall Street Journal.

AI Memory Boom Drives Samsung’s Results

The semiconductor business is expected to have driven the bulk of Samsung’s earnings growth, as surging AI infrastructure spending fuels demand for both conventional and high-bandwidth memory.

Samsung and Micron have warned that tight memory supply could persist through 2028, while Samsung expects shortages to worsen next year. 

Samsung’s shares have slumped more than 25% from a ​record high in June amid concerns about the durability of the AI boom.

TSMC Revenue Surges 50% On AI Demand

TSMC’s Q3 revenue beat analysts’ expectations of $1.46 trillion, according to an LSEG SmartEstimate. The strong performance further indicates the strength of AI-related semiconductor demand.

The Taiwanese chipmaker will report its full third-quarter results ​next Thursday, ⁠when it will also update its outlook and plans for the current quarter and the rest of the year.

On Stocktwits, the retail sentiment was ‘bearish’ for both MU and TSM as of early Thursday. “$TSM Should we worry about September revenue being down 0.6% from August?” a trader questioned.

 

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