South Korea’s Samsung Electronics on Thursday forecast a three-fold jump in fourth-quarter operating profit from a year earlier to a record high, as tight supply and surging artificial intelligence–driven demand lifted prices for conventional memory chips.
The world’s largest memory chipmaker estimated operating profit of 20 trillion won ($13.82 billion) for the October–December period, beating an LSEG SmartEstimate of 18 trillion won and sharply higher than 6.49 trillion won a year earlier, according to a regulatory filing. The result marks Samsung’s highest-ever quarterly profit, surpassing its previous record of 17.6 trillion won set in the third quarter of 2018.
Samsung shares ended the session down 1.6%, after rising as much as 2.5% to a record high earlier in the day, as investors locked in gains following a roughly 155% surge in the stock over the past year.
The results underscore how rapidly memory chip prices have climbed as chipmakers struggle to keep pace with demand from data centres, personal computers and mobile devices used to train and run AI models.
‘TERRIFIC’ CHIP DEMAND
Major memory producers, including South Korea’s SK Hynix and U.S.-based Micron Technology, are racing to expand fabrication capacity to meet booming demand.
“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, chief executive of Nvidia, speaking at the Consumer Electronics Show in Las Vegas. “The demand out there is really, really quite terrific.”
The global DRAM market is expected to more than double to $311 billion in 2026 from last year, nearly six times its size in 2023, according to Macquarie Equity Research. Contract prices for certain DRAM chips jumped 313% in the fourth quarter from a year earlier, data from market tracker TrendForce showed, which expects prices to rise another 55% to 60% in the current quarter.
Samsung also forecast revenue of 93 trillion won for the quarter, up 23% from a year earlier and a new record. Its semiconductor division is expected to generate around 17 trillion won of operating profit, accounting for the bulk of earnings, said Ryu Young-ho, a senior analyst at NH Investment & Securities.
RISING COST PRESSURES
While analysts remain broadly optimistic, warning signs are emerging. Rising memory component prices could squeeze margins for data centres, PCs and smartphones, potentially curbing demand. Samsung’s mobile business is expected to see profit decline year-on-year in the fourth quarter due to higher component costs, though gains in its display unit are likely to offset some pressure, analysts said.
Samsung co-CEO TM Roh told Reuters that the impact of rising memory prices was “inevitable” and did not rule out price increases for end products.
ADVANCED MEMORY OUTLOOK
Looking ahead, analysts expect Samsung’s high-bandwidth memory (HBM) business to grow significantly from 2026, supported by demand for custom AI chips and expectations of market share gains at Nvidia. Samsung co-CEO Jun Young-hyun said recently that customers had praised the competitiveness of its next-generation HBM4 chips, quoting them as saying, “Samsung is back.”
Samsung is scheduled to release detailed fourth-quarter results, including a breakdown by business division, on January 29.
