Samsung set to post biggest quarterly profit in six years as AI-driven chip crunch lifts prices

Samsung Electronics is expected to report a sharp jump in fourth-quarter operating profit, driven by a global memory chip shortage that has sent prices soaring as companies rush to secure components needed for artificial intelligence workloads.

Market estimates suggest the South Korean technology giant will post operating profit of around 16.9 trillion won for the October–December period, representing a year-on-year increase of roughly 160%. If confirmed, it would mark Samsung’s strongest quarterly performance since 2018, reflecting a rapid recovery after a prolonged downturn in the semiconductor cycle.

The surge has been fuelled by rising demand for memory chips as AI adoption accelerates, while supply remains constrained due to the industry’s shift toward advanced AI-focused semiconductors. Analysts say reduced production of conventional memory, combined with strong orders from data centres and cloud providers, has significantly tightened the market.

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Prices for DDR5 DRAM, widely used in servers, computers and smartphones, rose more than threefold in the fourth quarter compared to a year earlier, according to industry data. Research firm TrendForce expects conventional DRAM prices to continue climbing in the current quarter, potentially rising by as much as 60%.

Samsung, whose manufacturing capacity remains heavily weighted toward conventional memory, is seen as a key beneficiary of this pricing cycle. Some analysts have revised their profit forecasts upward in recent weeks, citing stronger-than-expected memory pricing momentum.

The company is scheduled to release preliminary earnings figures for revenue and operating profit later this week.

Samsung’s earnings rebound comes after a challenging period in which it lagged rivals in supplying high-end chips for AI accelerators, particularly to Nvidia. However, recent comments from company executives suggest progress in next-generation high-bandwidth memory development, including HBM4, which is expected to be used in upcoming AI platforms.

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Nvidia has confirmed that its next-generation chip systems are entering full production, potentially opening the door for increased Samsung participation in the AI supply chain. This could allow Samsung to regain market share from competitors such as SK Hynix and Micron.

Despite the strong outlook for semiconductors, concerns remain about pressure on Samsung’s mobile business, where rising component costs may weigh on margins. Executives have acknowledged that elevated chip prices pose challenges across the industry, even as they boost profitability in the company’s core semiconductor division.