Bloomberg
(Bloomberg) — Samsung Electronics Co.’s chip unit beat expectations with a more than five-fold gain in profit, a healthy signal for an artificial intelligence spending wave that’s triggered a surge in memory demand.
The South Korean company plans to expand sales of AI-related chips and is on track to begin delivering its next-generation high-bandwidth memory, HBM4, to Nvidia Corp. in the first quarter. That’s a key step in its bid to catch up with SK Hynix Inc. in a high-margin product essential for AI accelerators. Its shares gained more than 1% in extended trading.
Most Read from Bloomberg
Samsung’s strong showing followed better-than-anticipated results from its smaller rival, suggesting that voracious appetite for AI memory is outstripping global supply, creating a windfall for the two industry leaders. Meta Platforms Inc. and Microsoft Corp. unveiled sharp gains in capital spending when they reported results overnight. At the same time, that demand has caused shortages of conventional DRAM and NAND used in modern electronics from personal computers to smartphones. Samsung and Hynix executives will offer their outlook and perspectives for the market on separate calls Thursday morning.
“Samsung’s HBM4 confidence signals that its ‘fast follower’ journey is finally bearing fruit,” said Greg Roh, an analyst at Hyundai Motor Securities Co. “The company now appears to have the technical edge to lead the industry’s transition to next-generation of HBM later this year.”
Samsung reported a three-month operating profit of 16.4 trillion won ($11.4 billion), compared with analysts’ average projection of 10.85 trillion won. Its net income came to 19.29 trillion won, beating estimates of 15.1 trillion won. Samsung also said it would buy back 3.57 trillion won of its shares, and announced a special dividend payout that raises its fourth-quarter payout to 3.75 trillion won.
Photographer: SeongJoon Cho/Bloomberg
The company’s shares more than doubled in value in 2025 and surged about 35% this month, reflecting hopes for a blowout year as prices of memory chips climbed faster than anticipated. The growth is a reflection of the speed at which the industry’s balance has shifted as hyperscalers pour hundreds of billions of dollars into AI infrastructure.
Memory manufacturers are reallocating production lines toward lucrative HBM to satisfy the needs of AI data centers. Because HBM requires about three times the wafer capacity of standard DRAM for the same amount of memory, this shift has reduced supply for the consumer electronics industry. That’s threatening double-digit price hikes for PC makers and smaller electronics companies.
Attention is on the race for leadership in next-generation HBM4, which is set to be integrated with Nvidia’s upcoming flagship Rubin processors. Samsung is close to obtaining certification from Nvidia for the latest version of its AI memory chip.
“SK Hynix currently leads in HBM technology, while Samsung is working hard to close the gap,” said Young Jae Lee, senior investment manager at Pictet Asset Management Ltd. “Investors will be closely watching both companies for their perspective on the memory market outlook.”
The AI building rush is also helping to bolster Samsung’s foundry business, which competes with industry leader Taiwan Semiconductor Manufacturing Co. Sales at Samsung’s contract chipmaking business grew in the three months to December, with a recovery expected in its business in the current quarter, the company said. The division is also ramping up production of 2-nanometer products and targets double-digit revenue growth in 2026.
–With assistance from Sohee Kim and Edwin Chan.
Most Read from Bloomberg Businessweek
©2026 Bloomberg L.P.