^{Photo: South China Morning Post}

Samsung Delivers Record Quarter on AI Fueled Memory Surge

Samsung Electronics posted a blockbuster fourth quarter, reporting a more than threefold jump in profit and setting a new company record as explosive demand for AI servers tightened memory supplies worldwide.

The South Korean tech giant said operating profit for the December quarter surged to 20.1 trillion won (around $14 billion), exceeding market expectations of roughly 20.0 trillion won and topping Samsung’s own guidance. Revenue climbed to 93.8 trillion won ($65.6 billion), also beating forecasts and marking a new quarterly high.

Compared with the same period last year, revenue rose about 24%, while operating profit jumped more than 200%, reflecting a powerful rebound in the semiconductor cycle. The result eclipsed Samsung’s previous quarterly profit record of 17.6 trillion won set in 2018, highlighting how strongly artificial intelligence is reshaping the memory market.

Samsung shares initially rose 2.6% at the open before reversing course to trade about 1.5% lower later in the morning, as investors weighed the strong results against rising costs across parts of the business.

Memory Business Takes Center Stage

Samsung said its Device Solutions division, which houses the company’s memory and foundry operations, was the primary driver behind the earnings surge.

The memory segment delivered all time highs in both quarterly revenue and operating profit, fueled by a broad market price rebound, accelerating sales of high bandwidth memory, and increased shipments of other high value products.

High bandwidth memory, or HBM, has become one of the most sought after components in the AI era. The technology is essential for data center accelerators used by companies such as Nvidia, and demand continues to outstrip supply as cloud providers race to expand computing capacity.

Samsung has spent the past year pivoting more aggressively toward HBM and advanced DRAM under its Device Solutions division. As AI chipmakers scramble for limited volumes, memory suppliers have prioritized production for these higher margin products, contributing to a broader shortage across traditional PC and mobile memory markets.

That imbalance has pushed up prices for standard DRAM and NAND chips, creating a powerful tailwind for major producers like Samsung and SK Hynix, which also reported record earnings earlier this week.

Supply Tightness Lifts Prices Across the Industry

The global memory shortage is now rippling far beyond AI servers.

As manufacturers allocate capacity to meet booming HBM demand, supplies of conventional memory used in laptops, smartphones, and consumer electronics have tightened. Industry trackers report that average selling prices for DRAM rose sharply through the second half of 2025, with some categories seeing double digit sequential increases.

This pricing momentum has helped Samsung rapidly rebuild margins after a prolonged downturn in 2023 and early 2024, when weak demand and excess inventory pressured profitability.

In its outlook, Samsung said it expects AI and server demand to continue rising into the first quarter of 2026, creating what it described as “structural growth opportunities” for its semiconductor business.

The company added that it will continue emphasizing profitability by focusing on high performance and premium memory products, including next generation HBM.

Investment Strategy Shifts Back Toward Growth

Samsung also revealed that its capital expenditure declined over full year 2025 as it maintained what executives called a “conservative investment approach” during the earlier stages of the memory recovery.

That stance is now changing.

Management said it plans to ramp up memory investments this year to expand capacity and accelerate the rollout of advanced nodes and packaging technologies, aiming to defend market share against rivals such as SK Hynix and Micron while meeting surging AI driven demand.

During the earnings call, executives cautioned that although higher memory prices are boosting profits, rising costs are beginning to affect other areas of the business, particularly smartphones and displays. Component inflation and logistics expenses are expected to remain a headwind in the coming quarters.

Smartphones Face Pressure as Chips Shine

While semiconductors carried the quarter, Samsung’s mobile experience and networks division delivered softer results.

Operating profit in the smartphone and devices unit fell to 1.9 trillion won, down 9.5% from a year earlier and more than 45% from the previous quarter. The company attributed the decline to fading momentum from recent product launches and intensifying competition across global handset markets.

Looking ahead to early 2026, Samsung said it plans to reinvigorate its mobile lineup with the launch of the Galaxy S26 series, which will introduce what the company calls “Agentic AI experiences.” These features are designed to bring more on device intelligence to everyday tasks, from photography and productivity to personalized assistance.

Samsung also said it is working closely with suppliers to offset higher component costs by optimizing its supply chain and leveraging long term partnerships.

Display Business Rebounds on Strong Smartphone Demand

Samsung’s display unit delivered a brighter spot outside semiconductors, with operating profit more than doubling to 2 trillion won in the December quarter.

The improvement was driven by robust panel shipments to global smartphone brands, as demand stabilized in premium segments and OLED adoption continued to expand. Displays remain a strategically important business for Samsung, supporting both internal device production and external customers.

A Clear Signal of AI’s Impact on Big Tech Earnings

Samsung’s record breaking quarter underscores just how deeply artificial intelligence is reshaping the global semiconductor landscape. With HBM now a critical bottleneck for AI infrastructure, memory makers are enjoying a powerful pricing cycle that is lifting revenues and profits at an extraordinary pace.

For Samsung, the results mark a decisive turnaround from the industry slump of recent years and reinforce its position as one of the world’s most important suppliers of advanced memory.

As AI data centers multiply and next generation chips roll out through 2026, Samsung is betting that continued investment in high performance memory will keep earnings elevated, even as competition intensifies and costs rise elsewhere in the business.

‍