Samsung's profit triples to a record level, indicating robust demand for AI

Samsung Q4 Profit Triples to Record as AI Chip Boom Lifts Memory Prices

Samsung Electronics on Thursday reported a more than three-fold jump in fourth-quarter operating profit to a record high and forecast strong chip demand ahead, as the global race to build artificial intelligence infrastructure strains supply and drives up memory prices.

The results highlight the growing pricing power of the world’s largest memory chipmaker, with profit growth expected to accelerate further in the current quarter.

“The ongoing AI boom is expected to continue driving favourable market conditions across the industry” in the first quarter of 2026, Samsung said in a statement. However, the company warned that rising memory prices are weighing on its smartphone and display businesses and flagged risks including global tariffs.

Samsung shares, up nearly 40% so far this year, rose 1.2% in morning trade. Rival SK Hynix gained 3.7%.

Samsung posted 20 trillion won ($13.98 billion) in operating profit for the October–December quarter, in line with its earlier estimate and up from 6.49 trillion won a year earlier. Quarterly revenue rose 24% to 93.8 trillion won.

Chip business drives gains

Operating profit at Samsung’s chip division, its main earnings engine, surged 470% to a record 16.4 trillion won, reflecting soaring memory prices and strong AI-driven demand.

By contrast, profit at its mobile business fell 10% to 1.9 trillion won, squeezed by higher chip costs.

“Memory price increases are expected to accelerate this quarter and are likely to deliver surprise earnings, while the cost burden on the mobile business will intensify,” said Sohn In-joon, an analyst at Heungkuk Securities. He expects Samsung’s operating profit to rise nearly five-fold to about 35 trillion won this quarter from a year earlier.

Mobiles and displays face pressure

Samsung said its mobile division will face rising cost pressures in 2026. Co-CEO TM Roh described the chip shortage as “unprecedented” in an interview with Reuters and said price increases could not be ruled out.

“How the division defends margins as the year progresses will be a key issue,” said Ko Yeongmin, an analyst at Daol Investment & Securities.

Samsung’s display business also expects weaker smartphone demand in the current quarter as higher memory prices push up device costs, with customers likely to seek price cuts. Despite this, display profit more than doubled to 2 trillion won, helped by strong sales of displays for Apple’s iPhone 17 series.

HBM race heats up

Samsung said it is on track to begin shipments of its next-generation high-bandwidth memory (HBM4) chips in the current quarter. Analysts expect initial deliveries to go to Nvidia, a key customer for advanced AI memory.

The company has been trying to close the gap with local rival SK Hynix, a major supplier of HBM chips for Nvidia’s AI accelerators, after earlier supply delays hurt Samsung’s earnings and share price.

SK Hynix said on Thursday that large-scale production of its next-generation HBM chips is underway, after posting a more-than-doubling of fourth-quarter profit to a record.

Prices rise as supply tightens

The AI infrastructure boom has pushed chipmakers to divert capacity toward high-bandwidth memory used in AI servers, tightening supplies of conventional memory chips used in smartphones, PCs, and data centres.

Memory makers are aggressively raising prices. “They’re emboldened and confident—taking a ‘pay-it-or-leave-it’ approach—because demand is robust and supply is limited,” said Tobey Gonnerman, president of semiconductor distributor Fusion Worldwide.

“They’re in an enviable position to dictate pricing and terms more than ever,” he added.