Samsung’s earnings soar threefold as AI boosts demand in the memory sector

Samsung Achieves Record Quarterly Profit on Soaring AI Chip Demand

Samsung Electronics has reported its highest-ever quarterly profit, with earnings more than tripling thanks to a surge in demand for memory chips used in artificial intelligence servers. The company’s preliminary operating profit reached 20 trillion won (approximately $13.8 billion) for the final quarter of the year, marking a 208% increase and surpassing analyst expectations. Revenue also hit a new peak at 93 trillion won, up 23%. Following the announcement, Samsung’s stock climbed as much as 2.5% in Seoul, continuing a rally that has seen shares rise 20% since the beginning of the year. Shares of competitor SK Hynix Inc. also jumped by 6.2%.

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Amid a global rush to expand data center capacity, Samsung and other memory manufacturers are shifting their focus from standard consumer electronics to producing advanced chips for major AI companies like Nvidia. This pivot has led to a significant shortage of conventional memory chips for laptops and servers, driving up prices for both DRAM and NAND products.

“Large-scale cloud operators are purchasing substantial amounts of DRAM and are willing to pay a premium,” said Sanjeev Rana, head of research at CLSA Securities Korea.

According to Rana, DRAM prices soared by over 30% in the December quarter compared to the previous period, while NAND prices increased by about 20%. He expects these elevated prices to persist throughout 2026 and potentially into the first half of 2027, citing strong demand and limited supply as key factors.

Samsung’s stock value has more than doubled in 2025 and continued to climb this month, fueled by optimism after Micron Technology Inc. issued a positive outlook. In the past week alone, over ten analysts have raised their price targets for Samsung.

Jeff Kim, head of research at KB Securities, noted that the need for memory chips is expanding into new fields such as robotics and autonomous vehicles, while devices featuring AI capabilities are further boosting demand for DRAM and NAND.

“It’s premature to suggest that demand has peaked,” Kim said. “Investors should consider holding onto memory stocks. If there’s a dip in share prices following the 20 trillion won earnings report, it could present a buying opportunity.”

Samsung plans to release its full financial results, including net income and detailed segment breakdowns, on January 29.

At the CES trade show this week, Samsung executives highlighted the ongoing shortage of memory chips. President Wonjin Lee pointed out that consumer electronics prices are already on the rise and warned of potential challenges in semiconductor supply.

Market Outlook and Analyst Insights

Counterpoint Research predicts that DDR5 memory prices—the latest standard for computers and servers—will jump 40% this quarter compared to the previous one, with an additional 20% increase expected in the following quarter.

Bloomberg Intelligence Perspective:

Samsung’s preliminary operating-profit margin of 21.5% in the fourth quarter of 2025 indicates robust demand for both traditional DRAM, high-bandwidth memory (HBM), and NAND chips. The DRAM segment likely saw margins exceed 50%, with further improvement possible in early 2026. Samsung’s leading global market share in NAND is also expected to support profit growth in the coming year.

— Masahiro Wakasugi and Takumi Okano, analysts

Although Samsung has lagged behind SK Hynix and Micron in the high-bandwidth memory market, it delivered its latest HBM4 samples to Nvidia last year for qualification. This development has raised expectations that Samsung could narrow the gap with its competitors as it aims to begin mass production in the first half of this year to supply Nvidia’s upcoming Rubin processors. CLSA’s Rana anticipates that Samsung’s HBM shipments will triple in 2026 as HBM4 enters commercial production.

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