Samsung Electronics on Thursday projected a three-fold jump in fourth-quarter operating profit from a year earlier to a record high as tight supply and a surge in artificial intelligence-driven demand stoked prices for conventional memory chips.
The results highlight how chip prices have rocketed as chipmakers scramble to keep up with demand for memory chips used in servers, personal computers and mobile devices to meet AI needs.
The world’s largest memory chipmaker estimated an operating profit of ₩20-trillion won (around R226.9-billion) for the October-December period, beating an LSEG SmartEstimate of ₩18-trillion and up from ₩6.49-trillion a year earlier, a regulatory filing showed.
The operating profit is a new quarterly record, topping its previous high of ₩17.6-trillion in the third quarter of 2018.
Samsung shares edged up 0.6% in morning trade on Thursday to a record high, adding to a 155% jump over the past year.
The top makers of conventional chips, including South Korea’s SK Hynix and Micron Technology, are struggling to meet demand and have to build more fabrication plants.
“The world is going to need more fabs and the reason for that is because of this new industry called AI factories,” said Jensen Huang, CEO of the dominant maker of AI processors, Nvidia.
“It’s good to be a semiconductor manufacturer,” he told reporters at the Consumer Electronics Show in Las Vegas, adding that “the demand out there is really, really quite terrific”.
DRAM market
The global DRAM market is expected to more than double to $311-billion in 2026 from last year, which would be nearly six times the market’s size in 2023, Macquarie Equity Research said in a note on Tuesday.
DRAM chips are used in servers, computers and smartphones to temporarily store data and help run programmes and applications smoothly and swiftly.
Contract prices for a type of DRAM chip rose 313% in the fourth quarter from a year earlier, according to data from market tracker TrendForce.
TrendForce expects conventional DRAM contract prices to rise a further 55% to 60% in the current quarter from the previous one.
Read: Nvidia’s next AI chips are in full production
Samsung, which is also the world’s top maker of smartphones and TVs, expects revenue to rise 23% to a record ₩93-trillion from a year earlier.
Its semiconductor business will account for the lion’s share of its operating profit, generating about ₩17-trillion in the fourth quarter, according to Ryu Young-ho, a senior analyst at NH Investment & Securities.
He expects strong memory prices this year will more than offset sluggish growth in its mobile business, which he said would find it challenging to raise prices sharply to counter rising memory component costs.
Analysts remain broadly optimistic about Samsung’s earnings outlook, expecting memory undersupply to persist into 2026 as global data centre investment expands and capacity remains constrained.
However, some have cautioned that rising memory component prices could dampen demand and drive down margins for data centres, PCs and smartphones.
DB Securities analyst Seo Seung-yeon projected that fourth-quarter profit at Samsung’s mobile business is likely to decline from a year earlier due to higher component costs, while profit is expected to grow in its display business on robust sales of its major customer Apple’s iPhone 17 series.
Samsung’s co-CEO TM Roh, who oversees Samsung’s mobile, TV and home appliance business, said that some impact from rising memory prices was “inevitable”, and did not rule out raising product prices.
Analysts noted that Samsung’s high-bandwidth memory (HBM) business is poised for significant growth in 2026 from a low base in 2025, supported by stronger demand from customers adopting custom chips such as tensor processing units (TPUs) and expectations that Samsung will gain a higher market share at Nvidia.
Samsung’s co-CEO Jun Young-hyun said last week that Samsung customers have praised the competitiveness of the company’s next-generation HBM chips, or HBM4, quoting them as saying “Samsung is back”.
Read: Samsung goes trifold while Apple folds its arms
Samsung plans to release detailed results, including a breakdown of earnings for each of its business divisions on January 29. — Heekyong Yang, Joyce Lee, Hyunjoo Jin and Stephen Nellis, (c) 2025 Reuters
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