Samsung Electronics is set for a sharp profit rebound as soaring AI-driven memory chip prices push earnings toward record levels.
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| Samsung’s earnings rebound highlights how AI demand is transforming the semiconductor cycle while creating new risks across consumer electronics. Image: CH |
Seoul, South Korea — January 6, 2026:
Samsung Electronics’ expected surge in fourth-quarter operating profit signals a dramatic reversal in the semiconductor cycle, driven largely by the global rush to build artificial intelligence infrastructure. A projected 160% year-on-year increase would place the company’s quarterly earnings close to historic highs, underscoring how sharply memory chip pricing has turned in favor of producers.
At the core of the rebound is an unprecedented rise in DRAM prices. Advanced DDR5 chips, essential for AI servers and high-performance computing, saw prices soar more than threefold from a year earlier in the fourth quarter. Even conventional DRAM prices continue to climb, benefiting Samsung disproportionately because of its large production footprint in that segment. Analysts note that pricing momentum—rather than shipment growth—is now the dominant driver of profits across the memory industry.
The results also mark a strategic inflection point for Samsung’s leadership. Just over a year ago, the company publicly acknowledged it was lagging behind rival SK Hynix in supplying cutting-edge memory for Nvidia’s AI processors. Since then, Samsung has accelerated development of next-generation high-bandwidth memory, with growing expectations that it is gaining share in the race to supply Nvidia’s upcoming Vera Rubin AI platform. Success here would reinforce Samsung’s standing in the most profitable corner of the semiconductor market.
Investor sentiment has followed this turnaround. Samsung shares recorded their strongest annual gain in more than two decades last year, reflecting confidence that AI-related demand could sustain elevated memory prices longer than in previous cycles. Forecasts that full-year operating profit could exceed 100 trillion won suggest markets are betting on a structurally tighter supply-demand balance for advanced memory.
Yet the surge carries inherent risks. Higher chip prices can eventually weigh on downstream demand, potentially slowing purchases of PCs, smartphones and even data center equipment if costs become prohibitive. This tension is already visible within Samsung’s own business. While the semiconductor division enjoys widening margins, the mobile unit faces cost pressure as pricier memory components squeeze profitability, forcing management to absorb or mitigate the impact.
The situation illustrates a familiar paradox for diversified technology groups: strength in one division can create headwinds in another. For Samsung, booming chip earnings are once again offsetting weaker growth in consumer electronics, reinforcing its reliance on semiconductors as the company’s financial backbone.
In the near term, Samsung appears well positioned to ride the AI-led memory upcycle. Over the longer horizon, however, the durability of this profit revival will depend on whether global demand can sustain today’s elevated prices without triggering a slowdown—making the next phase of growth both promising and uncertain.