Samsung Made 106 Trillion Won in Chips While Its Phone Unit Lost Money. Why?
Samsung's third-quarter results put both sides of the memory price cycle inside one company. Suppliers gain when prices rise, and buyers carry the cost.
Samsung Electronics reported final third-quarter 2026 results on Oct. 29: revenue of 195.3 trillion won and operating profit of 107.4 trillion won. The operating margin was about 55.0%. According to Samsung, it is the first quarterly operating profit above 100 trillion won at a global technology company.
Record chip profit, losses in finished products
Split by business, the picture changes sharply.
| Division | Operating profit | Meaning |
|---|---|---|
| DS (semiconductors) | 106.5 trillion won | About 99.2% of company profit |
| MX and Networks | -0.6 trillion won | Operating loss under cost pressure |
| TV and home appliances | -0.2 trillion won | Cost and demand strain |
| Company total | 107.4 trillion won | Includes other units' profit and consolidation adjustments |
The DS division had revenue of 147.1 trillion won and an operating margin of about 72.4%. That figure covers the whole chip division, not memory products alone.
Why did AI profit concentrate in chips?
AI data centers need more than HBM (high-bandwidth memory). They also need server DRAM and storage. While demand grows quickly, supply of high-performance memory is hard to expand in the short run.
Samsung said server demand lifted market prices across several memory product lines. It said larger HBM4 sales and a mix tilted toward higher-value products supported earnings.
Volume is not the whole story. When supply is limited and customers must secure a part, the supplier's pricing power can rise. If higher prices and a better product mix arrive together, operating profit can grow faster than revenue.
One seller's price is another company's cost
Samsung sells memory, and it also makes smartphones.
For the memory business, higher selling prices improve profitability. For smartphone and PC makers, they raise component costs.
Still, it would be inaccurate to blame the MX and Networks loss on memory costs alone. Samsung pointed to broader cost pressure and a shift in product mix. In TV and home appliances, raw materials, logistics costs and demand also played a role. Revenue and cost structures differ by division as well.
So the results do not prove that memory prices are the only cause of the smartphone loss. They are closer to an example of how the same price change can be an opportunity for a supplier and a burden for a buyer.
What it means for Apple and Nvidia investors
Apple buys memory, but its premium brand, product pricing, supply contracts and purchasing scale give it some room to absorb higher costs or pass them on to consumers. The actual effect likely depends on contract terms, product mix, other component costs and exchange rates.
Nvidia is a different case. High-performance HBM is essential to supplying AI accelerators, yet Nvidia is also a buyer. Higher memory prices are a cost burden, and they may also signal that demand for AI infrastructure is strong. The key question is how much pricing power Nvidia keeps on the strength of system-level performance and its software ecosystem.
In the AI industry, the products that sell the most and the companies that earn the most do not always coincide.
Insight Times Editorial Desk
