Samsung Electronics estimates nearly three-fold profit surge as memory prices skyrocket
Samsung headquarters in Mountain View, California, October 28, 2018.
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South Korea’s Samsung Electronics It expects its profits to triple in the last three months of last year, reaching a record high, as memory prices rise amid rising demand from artificial intelligence.
The world’s largest memory chip maker estimated fourth-quarter operating profit reached 20 trillion won and consolidated sales reached nearly 93 trillion won, according to its earnings guidance launched Thursday.
Profit forecasts mark a significant improvement from the previous year and will exceed Samsung’s long-standing record of 17.6 trillion won set in the third quarter of 2018.
This increase comes as chipmakers such as Nvidia object to limited supplies of memory chips used for artificial intelligence applications.
Memory companies have prioritized capacity to meet this lucrative demand, affecting chips used in personal computers and mobile devices, contributing to a shortage in the broader market.
“The memory market has entered a ‘Hyper Bull’ phase where current conditions have eclipsed the historical peak of 2018. Supplier strength is at an all-time high driven by insatiable demand for artificial intelligence and server capacity,” Counterpoint Research said in a report Wednesday. he said.
The market watchdog estimates memory prices to rise 40% to 50% in the final quarter of 2025 and expects similar gains in the first quarter of 2026, followed by a rise of around 20% in the second quarter.
While these market dynamics have increased production costs for most consumer electronics manufacturers, they have been a boon for memory giants like Samsung and its main rivals in the space, SK Hynix. Micron.
Samsung shares have gained more than 145% in the past 12 months and were up 0.5% in choppy trading on Thursday.
The consumer tech giant continues to follow SK Hynix’s lead in high-bandwidth memory (HBM) chips used in AI processors like Nvidia’s. Expanding HBM production capacity is expected to be the company’s main focus in the new year.
Samsung will release its audited earnings and hold its quarterly earnings call later this month.
