Samsung expects Q4 profit to triple as AI memory demand surges

Samsung Electronics, a South Korean multinational technology giant, has experienced price hikes in its memory, largely driven by a surge in demand for AI applications. Following this increase, the tech company predicted its earnings could triple to an all-time high during the final three months of the previous year.

In its earnings guidance released on Thursday, January 8, the largest chip manufacturer globally anticipated achieving an operating profit of approximately 20 trillion won ($13.8 billion) and consolidated sales of 93 trillion won ($64.4 billion) in the fourth quarter.

Samsung expects a surge in earnings amid strong demand for memory 

Samsung’s anticipated returns demonstrated a significant breakthrough from the previous year, prompting analysts to believe that these earnings would surpass the tech giant’s historic record of 17.6 trillion won ($12.2 billion), which was achieved in the third quarter of 2018. Notably, this rise was recorded at a time when significant chipmakers, such as Nvidia, were competing for small memory chip supplies designed for AI applications.

At this point, sources discovered that memory manufacturing firms shifted their focus towards capacity to satisfy the booming demand. Consequently, this move resulted in a shortage in the overall market, with significant impacts on the chips used in personal computers and mobile devices.

Concerning this situation, Counterpoint Research shared a report dated Wednesday, January 7, highlighting that, “The memory market has entered a ‘Hyper-Bull’ phase, with current conditions eclipsing the historic 2018 peak. Supplier leverage is at an all-time high, driven by an insatiable demand for AI and server capacity.”

With this assertion, reports noted that the market watcher is looking forward to similar earnings in the first quarter of 2026. Afterwards, Counterpoint Research anticipates approximately a 20% surge in the second quarter. This was after it was projected that the prices of memory would rise by 40%-50% in the final quarter of last year.

Meanwhile, despite recent market conditions significantly contributing to a rise in manufacturing costs, particularly for several consumer electronics manufacturers, reports indicate that these conditions have played a crucial role in the overall performance of memory giants such as Samsung, SK Hynix, and Micron. 

To support this claim, Samsung announced that its shares had increased by more than 145% over the last 12 months. Additionally, these shares surged 0.5% on Thursday this week during choppy trading.

Individuals eagerly await Samsung’s quarterly earnings call

Samsung still lags behind tech firm SK Hynix in terms of high-bandwidth memory (HBM) chips. Notably, these chips are useful in AI processors similar to those Nvidia develops. With this finding, analysts predict that there is a high likelihood that the tech giant will prioritize increasing its HBM production capacity as its primary goal for the next year.

In the meantime, Samsung is expected to publish its audited earnings and conduct a quarterly earnings call later this month.

Daniel Kim, a Chicago-based analyst, weighed in on the situation. Kim observed that the memory market is becoming increasingly narrow, stating that “the memory shortage is getting worse, slowing down the entire IT supply chain.” Afterwards, he discouraged individuals from expecting a swift fix until 2028.

On the other hand, the global financial group Macquarie shared its belief that the memory sector will play a key role in Samsung’s rebound. According to them, operating profit in this sector is expected to rise from a record 64% year-over-year in 2025 to a new all-time high of 317% this year. The group also noted that the semiconductor division is expected to contribute approximately 55% of total sales and 90% of operating profit by 2026.

Claim your free seat in an exclusive crypto trading community - limited to 1,000 members.