Samsung profit triples, beating estimates as AI chip demand fuels memory shortage
Samsung headquarters in Mountain View, California, October 28, 2018.
Smith Collection/gado | Archive Photos | Getty Images
Samsung Electronics more than tripled its fourth-quarter profit on Thursday, hitting a new record and beating analysts’ forecasts as a memory chip shortage and strong demand for AI servers boosted earnings.
Here are Samsung’s fourth-quarter results compared to the LSEG SmartEstimate, which is weighted by analysts’ estimates, which are more consistently accurate:
- Revenues: 93.8 trillion Korean won ($65.58 billion) and an expected 93.318 trillion won
- Operating profit: While 20.1 trillion won was expected, 20.018 trillion won is expected
The South Korean technology giant’s quarterly revenue increased by approximately 24% compared to the previous year, reaching a new record. Meanwhile, operating profit increased by more than 200% year over year.
The profit surpassed Samsung’s long-time record of 17.6 trillion won set in the third quarter of 2018, while also matching Samsung’s own profit. guidance about 20 trillion won.
Samsung, South Korea’s largest company by market value, is a leading provider of memory chips, semiconductor foundry services and smartphones.
The company said in its earnings report that its memory business helped boost earnings by setting all-time highs in quarterly revenue and operating profit, driven by an increase in overall market prices, sales of high-bandwidth memory and other high value-added products.
High-bandwidth memory, or HBM, is a type of memory used in chipsets for AI data centers, and Samsung has focused more on this technology in the past year under its Device Solutions (DS) Division.
AI chipset makers like Nvidia are clamoring for limited HBM supplies as demand outstrips supply.
Memory companies have prioritized capacity to meet this lucrative demand, driving up prices for chips used in personal computers and mobile devices, contributing to a shortage in the broader market.
This has been a boon for memory giants like Samsung and rival SK Hynix, which reported record earnings on Wednesday.
“Looking ahead to the first quarter of 2026, the DS Division expects AI and server demand to continue to grow, leading to more opportunities for structural growth,” the company said.
“In contrast, the Division will continue to focus on profitability with a strong emphasis on high-performance products,” he added.
smartphones
Samsung’s mobile experience and networking businesses, which are charged with developing and selling smartphones, tablets, wearables and other devices, reported weaker results in the fourth quarter.
The division’s operating profit fell to 1.9 trillion won, down 9.5% from the previous year and more than 45% from the previous quarter.
The company said the losses were due to “diminished launch effects” of new smartphone models and intense market competition.
Looking ahead to the first quarter of 2026, Samsung said it plans to strengthen its AI smartphone push by offering what it calls “Agentic AI experiences” with the launch of the upcoming Galaxy S26 series.
Samsung also said it aims to ensure sustainable profitability through efforts to expand flagship sales, resource optimization and strengthen supply stability in the face of global competitive pressures.
