Samsung Electronics shares dropped 5% on October 29, 2026, despite record third-quarter profits, as investors criticized the lack of clarity on shareholder returns and a slight miss on chip division earnings. The stock’s decline contrasted with SK Hynix’s modest gain, highlighting diverging market reactions to semiconductor giants.
Samsung Electronics reported a 783% year-on-year surge in operating profit to 107.44 trillion won for the July-September period, driven by strong demand for AI chips. However, the stock fell 5.06% in Seoul, with investors frustrated by the company’s failure to outline detailed plans for returning its AI-driven windfall to shareholders. The company’s semiconductor division operating income fell 2% short of estimates, adding to the disappointment.
Profit and Investor Disappointment
The company’s capital spending in its chip division will rise 62 per cent to 76.8 trillion won this year, aiming to address the supply shortage. Concerns about financing for AI infrastructure and rising competition from China weighed on sentiment. Samsung’s mobile division, meanwhile, dragged down performance.
On October 29, South Korea’s Kospi index fell 2.74% intraday, with Samsung’s stock declining 5.06% and SK Hynix rising 0.54%. The Kospi closed at 5,847.61, down 164.83 points from the previous session. Foreign investors purchased net amounts of 397.2 billion won, while retail and institutional investors sold net amounts of 121.9 billion won and 353.6 billion won, respectively. The benchmark had earlier climbed to as much as 6,100.11 in early trading but reversed after it hit an intraday high.
Market Reaction Shows Divergence as Samsung Slumps, SK Hynix Rises
The broader South Korean market reflected Samsung’s struggles, with the Kospi index dropping 2.74% intraday. Samsung’s share decline outpaced the benchmark, while SK Hynix rose 0.54%. The gap between the two semiconductor giants highlighted diverging investor confidence. Samsung’s drop was nearly 3 percentage points deeper than the KOSPI’s decline, highlighting the sharp contrast in market responses.
Other sector players also faced volatility. Samsung Electro-Mechanics declined 6.97%, Hyundai Motor fell 3.04%, and Samsung Life Insurance decreased 2.16%. On the Kosdaq, EcoPro and EcoPro BM declined 5.48% and 6.77%, respectively, while Simtech fell 6.04% and Rainbow Robotics lost 7.17%. The KOSPI fell 3% intraday to 5,831.67 points on Oct. 29 as Samsung Electronics dropped nearly 6%, while SK hynix shares slipped 0.4%.
The KOSPI fell 2.74%.
Future Outlook Warns of Worsening Chip Shortages
Samsung’s outlook points to strong AI demand, with the company forecasting that the supply shortage of memory chips will be more severe next year. However, supply constraints are expected to worsen, with the company warning of a more severe memory chip shortage.
The firm also formed a partnership with French AI startup Mistral AI to integrate AI technologies in its semiconductor operations, including chip design and manufacturing, and headed Mistral’s Series D funding round. Despite these moves, investors remain cautious.
Samsung anticipates that the capital expenditure in 2026 will be about 84.4 trillion won, a notable rise from 52.7 trillion won in 2025. The company plans to invest 76.8 trillion won in its chip division this year, targeting market share from SK Hynix Inc. and Micron Technology Inc. However, chip-division operating income fell about 2% shy of estimates, according to Bloomberg.
Analysts noted that Samsung’s reliance on memory chips for profit has intensified. For all the talk of Samsung being a diversified tech giant, its chip business accounted for nearly all of its operating profit in the third quarter, highlighting its growing reliance on memory chips,
said Josh Gilbert, APAC Lead Analyst at eToro. The company’s semiconductor business reported 147.1 trillion won in revenue and 106.5 trillion won in operating profit, but net profit was 75.21 trillion won, significantly below the market estimate of 89.06 trillion won, according to SOURCE 6.
Samsung’s third-quarter results featured 30 trillion won in cash dividends, with intentions to return another 55 trillion to 75 trillion won to shareholders this year through dividends and share buybacks, as the board will determine the total shareholder returns and specific execution plans at a meeting scheduled for late January 2027. The company previously noted this year’s shareholder returns are projected to reach between 90 trillion and 110 trillion won including 30 trillion won in third-quarter dividends.