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Samsung Electronics has forecast record quarterly earnings, cementing a turnaround for the South Korean technology group as demand surges for chips during the global race to build out data centres powering artificial intelligence.
The world’s largest memory-chip maker on Thursday estimated that its fourth-quarter operating profit trebled to about Won20tn ($13.8bn) from a year earlier, surpassing analyst estimates of Won17tn. The company forecast a 23 per cent revenue increase to Won93tn.
The strong guidance highlights the continued AI boom with Samsung now seen as one of the biggest beneficiaries of a chip supply crunch sparked by the industry’s focus on cutting-edge high-bandwidth memory chips used in AI hardware.
Samsung’s share price rose 125 per cent last year to Won119,900, the stock’s biggest annual percentage gain in 26 years. South Korean chipmakers’ pivotal role in the AI supply chain made the country’s stock market the best performer among major economies last year, driving the Kospi benchmark index up 76 per cent to a record high.
“We are seeing the beginning of the unprecedented semiconductor supercycle,” said Daniel Kim, head of Korea Research at Macquarie Capital. “The best is yet to come, with the Dram shortage making Samsung’s HBM performance a secondary issue.”
Kim added that the shortage was unlikely to abate by 2027, making conventional dynamic random-access memory chips — which are used in everything from cars to computers for temporary data storage — much more profitable than HBM chips.
The robust performance marks a sharp reversal of Samsung’s fortunes after chief executive Jun Young-hyun had to make an apology a year ago for the company’s underperformance in HBM, which had fuelled concern over its competitive edge.
In recent months, Samsung chair Lee Jae-yong has been holding a series of high-profile meetings as he seeks to keep his company in a strong position for the global AI build-out. In October, he met Nvidia chief executive Jensen Huang and in November Asia’s richest man Mukesh Ambani.
Analysts said Samsung was now on track to be a key supplier for Nvidia, with its most advanced HBM4 chips likely to be used in the US company’s Vera Rubin platform. Nvidia’s Huang said on Monday that the company’s next generation of chips was in full production.
Jun said in a new year’s speech last week that customers had praised its latest HBM4 chips, saying: “Samsung is back.” He added that its lossmaking contract chip manufacturing business was “primed for a Great Leap Forward” following recent supply deals with major customers such as Tesla.
Samsung’s upbeat guidance comes after its US rival Micron Technology forecast second-quarter adjusted profit at nearly double analyst estimates.
“As conventional Dram prices continue to surge, Samsung — whose production capacity is largely concentrated in this segment — stands to gain relatively more from the current price upcycle,” said market research company TrendForce analyst Avril Wu in a recent note.
Peter Lee, an analyst at Citigroup, expects Samsung to report record operating profit of Won155tn this year, compared with Won43.5tn in 2025. He forecast AI-related demand to drive up average Dram and Nand flash memory chip prices 88 per cent and 74 per cent, respectively.
But the surging chip prices are squeezing the margins of Samsung’s other businesses such as smartphones and home appliances. The company will announce full fourth-quarter results with divisional breakdowns later this month.
Nomura expects Samsung’s HBM sales to double this year but production of lower-end memory chips to increase 20 per cent this year, falling short of demand.
“In our view, meaningful supply growth of commodity Dram and Nand may only happen in 2028-2029”, when Samsung’s new production facilities come online, said CW Chung and Eon Hwang at Nomura in a report last month.
