AI boom triples Samsung's profit to an all‑time high
What's the story
Samsung Electronics has posted a record high quarterly profit, more than tripling due to the global demand for AI servers that sharply increased memory chip prices. The South Korean tech giant reported a preliminary operating profit of 20 trillion won ($13.8 billion) for the December quarter, up 208% from last year and beating analyst estimates. The company's revenue also rose by 28% to a record high of 93 trillion won during this period.
Stock status
Samsung's stock performance and market shift
Despite the stellar financial results, Samsung's shares fell by 1.6% in pre-market trade on Thursday. This comes after an 18% rise this year so far. The company is shifting its production focus from everyday tech to high-end chips for AI giants like NVIDIA, amid a global rush to set up massive data centers. This shift has led to a shortage of standard memory for laptops and servers, driving up prices for both DRAM and NAND.
Price hike
DRAM and NAND prices surge amid supply crunch
Sanjeev Rana, the head of research at CLSA Securities Korea, said that "hyperscalers and cloud providers are buying a lot of DRAM and they are willing to pay a price premium." He added that average selling prices of DRAM jumped over 30% sequentially in the December quarter while those for NAND rose by about 20%. Rana also predicted these prices would remain strong throughout 2026 and possibly into H1 2027 due to strong demand and tight supply.
Market outlook
Samsung's market position and future prospects
Samsung's shares have more than doubled in value in 2025 and surged again this month. This is mainly due to the company's strong market position and prospects of a successful year, especially after rival Micron Technology Inc.'s upbeat forecast. More than 10 analysts tracked by Bloomberg raised their target price for Samsung in just the past week alone.
Supply challenge
Samsung's response to memory chip supply crunch
At the CES trade show this week, Samsung executives highlighted the severity of the memory chip supply crunch. President Wonjin Lee warned that consumer electronics prices are already rising and "there's going to be issues around semiconductor supplies." Counterpoint Research predicts a 40% price rise for DDR5 in the current quarter compared with the prior three months, followed by another 20% growth in the subsequent quarter.
Tech advancement
Samsung's HBM4 samples delivered to NVIDIA
Samsung, which has lagged behind SK Hynix Inc. and Micron in high-bandwidth memory (HBM), delivered its cutting-edge HBM4 samples to NVIDIA last year for qualification testing. This development has raised hopes that Samsung could catch up with its rivals in the race to mass-produce these chips in H1 this year. CLSA's Rana expects Samsung's total HBM shipments will triple by 2026 as HBM4 enters commercial supply.