Samsung Q4 Profits Treble on AI HBM Demand
By Reuters | 28 Jan, 2026

Profits for Q1 2026 are expected to rise fivefold over 2025 on growing memory demand.

Samsung Electronics said its operating profit more than tripled to a record high in the fourth quarter and forecast strong chip demand ahead, as the race to build artificial intelligence strains chip supply and boosts prices. 

The results underscore the strong pricing power of the world's top memory chipmaker, with its profit growth set to accelerate this quarter.

"The ongoing AI boom is expected to continue driving favorable market conditions across the industry" in the first quarter of 2026, Samsung said in a statement. 

However, it warned rising memory chip prices are weighing on its smartphone and display business and cautioned there are other lingering risks, such as global tariffs. 

Samsung shares, which have surged nearly 40% this year, rose 1.2% in morning trade, while rival SK Hynix's shares climbed 3.7%.

Samsung posted 20 trillion won ($13.98 billion) in operating profit for the October to December period, in line with its estimate of 20 trillion won and up from 6.49 trillion won a year earlier. 

The South Korean company's revenue rose 24% to 93.8 trillion won in the quarter from a year earlier. 

Operating profit at Samsung's chip business, its main cash cow, surged 470% to a record high 16.4 trillion won in the fourth quarter from a year earlier, while its mobile profit declined by 10% to 1.9 trillion won, squeezed by surging chip prices.

“Memory price increases are expected to accelerate this quarter and are likely to give surprise earnings, while the memory cost burden will intensify on its mobile business,” said Sohn In-joon, an analyst at Heungkuk Securities. 

He expects Samsung’s profit to surge five-fold to around 35 trillion won in the current quarter from a year earlier.

MOBILES FACE MEMORY HEADWIND

Samsung said its mobile business is expected to face rising cost pressures this year. Samsung co-CEO TM Roh described the acute chip shortage as "unprecedented" in an interview with Reuters, adding that he did not rule out raising prices. 

"How the division defends margins as the year progresses will be a key issue," said Ko Yeongmin, an analyst at Daol Investment & Securities.

The display business also expects smartphone demand to weaken in the current quarter as prices soar on the memory chip supply shortage, and anticipates customers will push for price cuts.

Its display business profit more than doubled to 2 trillion won on robust sales of its major customer Apple's iPhone 17 series. 

HBM CHIPS FOR NVIDIA

Samsung Electronics said on Thursday it is on track to begin delivering its next-generation high-bandwidth memory (HBM) chips, or HBM4, in the current quarter. Analysts expect the chips to be initially shipped to Nvidia. 

Samsung has been trying to catch up with its cross-town rival SK Hynix, a primary supplier for the advanced memory chips crucial for Nvidia's AI accelerators, after facing supply delays that hit ‌its earnings and share price last year.

SK Hynix said on Thursday that large-scale production of its next-generation HBM was underway to meet customer requests, after booking fourth-quarter profit that more than doubled to a record. 

The race to build AI infrastructure prompted chipmakers to divert manufacturing capacity toward high-bandwidth memory for AI servers, squeezing the supply of conventional memory chips, which are used not only in smartphones and PCs but increasingly in data centres. 

Memory chipmakers are raising prices aggressively, "emboldened and confident - and taking a 'pay-it-or-leave-it' approach - because there is ample robust demand, and they can't possibly fill it all," said Tobey Gonnerman, president of semiconductor distributor Fusion Worldwide. 

"They’re in the enviable position of being able to dictate price, terms, etc more than ever," he said. 

($1 = 1,430.3000 won)

(Reporting by Hyunjoo Jin, Heekyong Yang and Joyce Lee; Editing by Jamie Freed and Sonali Paul)