Samsung Forecasts Record Profit Surge, Fueled by AI-Driven Chip Boom

Samsung Electronics announced on Thursday a staggering projection: its fourth-quarter operating profit is set to triple year-over-year, reaching an unprecedented high. This forecast underscores how the global artificial intelligence revolution, coupled with a persistent supply crunch, has supercharged the market for foundational memory chips.

Record-Breaking Numbers
The world’s leading memory chipmaker estimated an operating profit of 20 trillion won ($13.82 billion) for the October-December period. This figure surpassed the LSEG Smart Estimate of 18 trillion won and represents a monumental leap from the 6.49 trillion won reported a year earlier. The result establishes a new quarterly record for Samsung, eclipsing its previous high of 17.6 trillion won from the third quarter of 2018. The company also anticipates revenue to rise 23% to a record 93 trillion won.

The AI Engine Driving Growth
The results highlight a seismic shift in the semiconductor landscape. As demand for AI processing explodes in data centers, servers, and next-generation devices, the need for high-performance memory to feed these systems has skyrocketed. This has reversed a prolonged downturn, sending prices for traditional DRAM and NAND flash chips soaring.

• Price Surge: According to market tracker TrendForce, contract prices for a critical type of DRAM chip surged 313% in the fourth quarter from a year earlier. The firm forecasts prices will rise another 55% to 60% in the current quarter.

• Industry-Wide Impact: The boom is a tide lifting all major players. Rivals SK Hynix and Micron Technology are also struggling to meet demand, leading to industry-wide calls for expanded manufacturing capacity. Jensen Huang, CEO of AI chip giant Nvidia, emphasized this at CES, stating, “The world is going to need more fabs… because of this new industry called AI factories.”

• Market Expansion: Macquarie Equity Research projects the global DRAM market will more than double to $311 billion by 2026 from last year, signaling a sustained expansion.

Divergent Fortunes Within Samsung
While the semiconductor division is the clear powerhouse, accounting for an estimated 85% (about 17 trillion won) of the quarterly operating profit according to NH Investment & Securities, other business units face headwinds.

• Mobile Challenges: Analysts, including DB Securities’ Seo Seung-yeon, project that profit at Samsung’s mobile business likely declined year-over-year in the fourth quarter. The division is caught between rising memory component costs and the challenge of passing those costs onto consumers through sharp smartphone price hikes.

• Display Bright Spot: Conversely, Samsung’s display business is expected to show profit growth, bolstered by robust sales of its major client Apple’s latest iPhone series.

• Consumer Electronics Pressure: The division overseeing TVs and home appliances acknowledged to Reuters that some impact from rising memory prices was “inevitable,” leaving the door open to potential product price increases.

Future Outlook: Cautious Optimism with New Frontiers
Analysts remain broadly bullish on Samsung’s earnings trajectory for 2025, expecting memory undersupply to persist as global data center investment expands. However, some caution that excessively high chip prices could eventually dampen demand and squeeze margins for downstream products like PCs and smartphones.

A critical future growth vector is the High-Bandwidth Memory (HBM) market—a premium, AI-essential chip where Samsung has trailed SK Hynix. The outlook here is turning positive.

• HBM Momentum: Analysts note Samsung’s HBM business is poised for significant growth in 2026 from a low base in 2025. This is supported by stronger demand from clients developing custom AI chips (like Google’s TPUs) and expectations that Samsung will capture a higher market share at Nvidia.

• “Samsung is Back”: Co-CEO Jun Young-hyun recently revealed that customers have praised the competitiveness of Samsung’s next-generation HBM4 chips, relaying the message: “Samsung is back.” This signals a potentially major comeback in the most lucrative segment of the memory market.

Market Reaction
Despite the blockbuster forecast, Samsung’s shares closed down 1.6%, having given up earlier gains that pushed them to a record high. The movement reflects profit-taking from investors who have enjoyed a 155% surge in the stock over the past year.

Samsung will release its detailed audited results, including divisional breakdowns, on January 29, providing a fuller picture of how the AI windfall is reshaping its business portfolio.