Samsung Electronics, the world's largest memory chip manufacturer, is scheduled to announce its preliminary fourth-quarter 2025 results this Thursday. Analysts anticipate a staggering 160% year-on-year surge in Samsung's Q4 operating profit, driven by a severe chip shortage that has propelled memory chip prices sharply higher. According to forecasts from 31 analysts compiled by LSEG SmartEstimate, Samsung is expected to post an operating profit of 16.9 trillion won (approximately $117 billion) for the October-December period, significantly up from 6.49 trillion won a year earlier, marking its highest quarterly profit since Q3 2018. DRAM chips, widely used in servers, computers, and smartphones for temporary data storage to ensure smooth and fast operation of programs and applications, are at the center of this surge. DDR5 DRAM, a newer generation offering superior speed and efficiency over its predecessors, is a key driver. The current price uptick is primarily fueled by the explosive and sustained demand for AI servers. The massive consumption of high-performance memory chips by AI servers has created a structural shortage in supply for traditional consumer electronics and industrial control sectors. This supply-demand imbalance is further exacerbated by production allocation strategies at memory chip manufacturers, with some shifting more capacity towards the higher-margin server market. Data from TrendForce indicates that Q4 DDR5 DRAM chip prices skyrocketed by 314% compared to the same period last year. As DRAM manufacturers aggressively shift advanced process nodes and new capacity towards Server and HBM applications to meet AI Server demand, supply for other markets has tightened severely. The institution forecasts that contract prices for traditional DRAM this quarter will rise by 55% to 60% compared to Q4 last year, while contract prices for NAND flash products are expected to increase by 33% to 38%. Informed sources suggest that Samsung Electronics and SK Hynix plan to increase server DRAM (Dynamic Random-Access Memory) prices by 60%-70% in Q1 2026 compared to Q4 2025. Reports indicate that both companies have also proposed price hikes of a similar magnitude to their PC and smartphone DRAM customers. "With the continuous sharp rise in traditional DRAM chip prices, Samsung, which has highly concentrated capacity in this area, is poised to reap relatively larger gains during this price hike cycle," commented Wu Yiwen, an analyst at TrendForce. Looking ahead, Guojin Securities believes the global memory chip market will remain undersupplied in 2026, supporting continued price increases. They forecast the bit supply growth rate for DRAM in 2026 to be approximately 15% to 20%, while demand growth is expected to reach around 20% to 25%. Nomura Securities stated that the current memory super-cycle, which began in the second half of this year, is likely to persist until at least 2027, with any truly significant new supply not expected to emerge until early 2028 at the earliest. Nomura's analyst team advised investors to continue overweighting leading memory stocks in 2026, positioning the price-profit-valuation trifecta as the core investment theme for memory next year, rather than viewing it solely through the HBM lens. The institution expects the three major memory chip companies (Samsung Electronics, SK Hynix, Micron Technology) to achieve record-high profits. Relevant concept stocks: SMIC (00981): Financial reports show SMIC's Q3 sales revenue reached $2.382 billion, a 9.7% year-on-year increase; its gross margin was 22%, up 1.6 percentage points quarter-on-quarter. Capacity utilization rose to 95.8%, a 3.3% quarter-on-quarter increase. Regarding product platforms, its ultra-low-power 28nm logic process has entered mass production, offering customers lower power consumption and higher quality solutions; its CIS image sensor and ISP signal processing technologies continue to iterate, improving light sensitivity, image quality, and high signal-to-noise ratio, while developing optical process platforms covering more wavelengths; its embedded storage platform is expanding from consumer markets to automotive-grade and industrial MCU fields; its specialty memory offerings, including Nor and NAND (both non-volatile), provide high-reliability storage platforms with higher density, smaller size, and lower power consumption. HUA HONG SEMI (01347): Financial reports indicate HUA HONG SEMI's Q3 revenue reached $635.2 million, a 20.7% year-on-year increase; its gross margin was 13.5%, up 1.3% year-on-year and 2.6% quarter-on-quarter. Benefiting from increased demand for flash memory, logic, and analog products, revenue from its 65nm and below process nodes grew 47.7% year-on-year, accounting for 27.1% of total sales revenue. SHANGHAI FUDAN (01385): As a domestic chip design company with a relatively broad product line, its business encompasses four major product categories: security and identification chips, non-volatile memory, smart meter chips, and FPGAs (Field-Programmable Gate Arrays). Through its controlling subsidiary, Hualing Co., Ltd., the company provides chip testing services to customers.
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