Samsung Electronics reported a more than threefold increase in fourth-quarter operating profit on Thursday, surpassing analysts’ estimates due to a memory chip shortage fueled by strong artificial intelligence server demand.
The company’s shares rose 2.58 percent at the market open before declining 1.54 percent during morning trading. Executives during an earnings call stated that surging memory prices boosted the chip business, while rising costs will affect the smartphone and display divisions. Samsung indicated that capital expenditure for the full year of 2025 decreased as the company adopted a conservative investment approach. Memory investments, however, are set to increase this year.
Samsung’s fourth-quarter results, measured against LSEG SmartEstimate figures, showed specific outcomes in key metrics:
- Revenue: 93.8 trillion Korean won ($65.58 billion) compared to the expected 93.318 trillion won.
- Operating profit: 20.1 trillion won compared to the expected 20.018 trillion won.
Quarterly revenue increased approximately 24 percent from the previous year, achieving a new record level. Operating profit rose over 200 percent year over year, exceeding the prior record of 17.6 trillion won established in the third quarter of 2018. This performance aligned with Samsung’s own guidance of around 20 trillion won. As South Korea’s largest company by market capitalization, Samsung ranks as a primary supplier of memory chips, semiconductor foundry services, and smartphones.
The memory business propelled these earnings, reaching all-time highs in quarterly revenue and operating profit. Factors included a surge in overall market prices, sales of high-bandwidth memory (HBM), and other high-value-added products. HBM serves as a specialized memory type integrated into chipsets for AI data centers. Over the past year, Samsung’s Device Solutions (DS) Division has directed greater emphasis toward this technology.
AI chipset manufacturers, including Nvidia, face constrained HBM supplies amid demand exceeding availability. Memory producers have allocated capacity preferentially to fulfill this high-margin demand, resulting in shortages across the wider memory market. Consequently, prices for chips used in personal computers and mobile devices have risen. This situation has advantaged major memory producers such as Samsung and its competitor SK Hynix, which disclosed record earnings on Wednesday.
For the first quarter of 2026, the DS Division anticipates sustained growth in AI and server demand, presenting structural growth opportunities. The division plans to prioritize high-performance products to sustain profitability.
In contrast, the Mobile Experience and Networks division, responsible for developing and selling smartphones, tablets, wearables, and related devices, recorded lower results. Operating profit dropped to 1.9 trillion won, reflecting a 9.5 percent decline from the year-earlier period and more than a 45 percent decrease from the prior quarter. Samsung attributed these results to diminished launch effects from new smartphone models and heightened market competition.
Addressing the first quarter of 2026, Samsung intends to advance its AI smartphone strategy by introducing “Agentic AI experiences” alongside the Galaxy S26 series launch. To counter elevated component costs, the company will utilize supplier partnerships to optimize resources and the supply chain.
The Display business, which provides screens for consumer electronics, saw profits more than double to 2 trillion won during the December quarter. This growth stemmed from strong sales to smartphone brands.
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