By Kwanwoo Jun
Samsung Electronics posted stronger-than-expected net profit in the fourth quarter, with earnings from its core semiconductor business rising sharply amid demand for advanced chips for the artificial-intelligence infrastructure buildout.
The world's largest memory-chip maker has been a major beneficiary of the AI boom. The race to build data centers has led manufacturers to prioritize AI memory orders, causing a shortage in conventional semiconductors and prices to surge. The company on Thursday said it expects continued growth in its semiconductor business in the first quarter, driven by demand for AI and data servers.
For the three months ended December, net profit more than doubled from a year earlier to 19.642 trillion won, equivalent to $13.73 billion. The result, a 61% increase from the previous quarter, beat analysts' estimates for 16.413 trillion won, according to a FactSet consensus.
Samsung's flagship chip-making division generated operating profit of 16.4 trillion won, more than doubling from the prior quarter. That accounted for more than 80% of total earnings.
Its mobile-handset segment didn't perform as well. The South Korean company, which is also a top global smartphone maker, said operating profit dropped 47% sequentially as the effect of new model launches faded.
Revenue for the fourth quarter increased 24% from a year ago to 93.837 trillion won, slightly above the company's preliminary estimate. Operating profit tripled to a record 20.074 trillion won, largely meeting guidance.
For 2025, the company reported net profit of 45.207 trillion won and operating profit of 43.601 trillion won--up 31% and 33%, respectively--as revenue rose 11% to 333.606 trillion won.
The company said its facility investment in 2025 was 52.7 trillion won, up 11% from its earlier estimate, in response to the growing chip market.
Samsung said it will "proactively address market demand by focusing on high-value-added products," as the industry is expected to remain robust amid strong demand for AI memory products. The company will start mass producing the industry's most advanced high-bandwidth-memory 4 products in the first quarter of 2026, it said.
Shares in Samsung briefly hit an intraday high on Thursday before giving up the gains, trading about 1% lower. The stock remains more than 30% higher this year after more than doubling in 2025 as investors continue to pile into chip stocks, betting that strong earnings will persist.
Analysts expect earnings momentum to continue, fueled by strong price growth in memory products as demand remains robust and supply stays tight. The rapid buildout of AI infrastructure is consuming a large share of the available supply of memory chips and hard drives.
The memory market has entered a hyper-bull phase, eclipsing the historic 2018 industry boom, said M.S. Hwang and Jeongku Choi of Counterpoint Research, a Hong Kong-based global research company, in a recent report. They expect memory-chip prices, which rose an estimated 40%-50% in the fourth quarter last year, to rise a further 40%-50% this quarter and around 20% in the next.
HSBC analyst Ricky Seo said Samsung's operating profit could reach a new all-time high of 29 trillion won in the first quarter, driven by higher memory-chip prices. Samsung's shift toward higher-end chips such as double-data-rate-5 and HBM products can only help buoy its margins, he said.
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com
(END) Dow Jones Newswires
January 28, 2026 21:23 ET (02:23 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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