Samsung Electronics recorded its highest-ever quarterly revenue in the third quarter of this year, despite sluggish profitability in the semiconductor (DS) sector due to a rise in one-off costs.

On Oct. 31, Samsung Electronics announced its Q3 consolidated revenue of 79.1 trillion won (approximately $57.35 billion) and operating profit of 9.18 trillion won. The company surpassed its previous revenue record set in Q1 2022 at 77.78 trillion won. Compared to the same period last year, revenue and operating profit grew by 17.4 percent and 222.7 percent, respectively, propelled by an improved semiconductor market rebounding from last year’s severe downturn, alongside strong sales in strategic smartphone and TV markets.

Exchange rates were also a key variable in third-quarter performance, with the stronger won negatively impacting overall operating profit by about 500 billion won.

The Device Solutions (DS) division posted revenue of 29.27 trillion won, marking a 78 percent year-over-year increase, and it rebounded to a 3.86 trillion won profit from a 3.75 trillion won loss in Q3 last year. The division benefited from rising demand for artificial intelligence (AI), high-bandwidth memory (HBM), double data rate (DDR) 5, and server solid-state drives (SSD), leading to a 3 percent quarter-over-quarter revenue increase. However, one-off expenses such as performance bonuses and the foreign exchange rate impacted operating profit, resulting in a 40 percent drop from 6.45 trillion won in Q2. In the System LSI division, while sales of system-on-chip (SoC) and display driver ICs (DDI) increased, profits declined due to one-off expenses. The Foundry division also struggled with weak demand.

In Q3, the Device eXperience (DX) division reported 44.99 trillion won in revenue and 3.37 trillion won in operating profit. Revenue grew by 2 percent year-over-year, though operating profit fell by 9.7 percent. The Mobile eXperience (MX) division achieved a profit margin exceeding 10 percent thanks to new smartphone, tablet, and wearable sales, while the Network division was affected by reduced telecom investment and a seasonal downturn. The Visual Display (VD) division saw notable growth year-over-year, driven by strong sales of Neo QLED, OLED, large TVs, and increased service revenue. The Digital Appliances division also showed improvement, primarily due to increased sales of “Bespoke AI” products.

Harman achieved revenue of 3.53 trillion won and an operating profit of 360 billion won in Q3, bolstered by consumer audio sales and an improved cost structure. Samsung Display Co. (SDC) recorded revenue of 8 trillion won and an operating profit of 1.51 trillion won. Small and medium-sized panel sales improved due to the launch of new smartphones by key customers, and large panel sales rose with increased demand for TVs and monitors.

Samsung Electronics expects growth in the semiconductor sector in Q4, although overall growth may be limited due to weaker performance in finished product businesses. The DS division plans to enhance its portfolio with high-value memory products and advanced technology, while the DX division aims to boost profitability through premium product sales and AI strategy reinforcement. Specifically, the DS will expand HBM sales in DRAM and cater to the demand for high-capacity DDR5 32-gigabit products for servers. The System LSI division aims to expand supply of the “Exynos 2400.”

Samsung Electronics plans to increase sales of 5th generation HBM3E and commence mass production of 6th generation HBM4 in the latter half of next year. The Foundry division is working on advanced technology to achieve successful mass production of 2-nanometer (nm) nodes next year.

In an announcement on Oct. 31, Samsung Electronics projected its total capital expenditure for the year to reach 56.7 trillion won. The DS division accounts for 47.9 trillion won, and the display segment accounts for 5.6 trillion won.

This surpasses its previous high of 53 trillion won in 2022 by more than 3 trillion won. Last year, Samsung spent 53.11 trillion won on capital investment.

Samsung Electronics stated that it will focus on converting investments to support high-value-added products, with research and development (R&D) and investments in back-end processes in the DS division. For displays, the investment will support expanding production of small- to medium-sized displays.