Berliner Boersenzeitung - Samsung Electronics posts record profit on AI demand

A global AI boom has pushed up prices and shipments of conventional chips, while demand for high‑bandwidth memory chips, used in servers that power the technology, has soared.

The hunger for chips to power AI has caused a shortage for consumer electronics, threatening higher prices for phones, laptops and other devices.

In a statement, Samsung said that in the quarter ending in December last year, it had posted "its highest-ever quarterly consolidated revenue at KRW 93.8 trillion (US$65.5 billion), representing a quarter-on-quarter increase of nine percent".

"Operating profit was also an all-time high, at KRW 20.1 trillion," it added.

Annual revenue stood at 333.6 trillion won, while its operating profit came in at 43.6 trillion won, the firm said.

Samsung attributed the strong earnings to its Device Solutions division, which oversees its semiconductor business, where sales in the last quarter rose 33 percent.

Its memory business also posted an "all-time high for quarterly revenue and operating profit", it said.

Samsung pointed to a $33.2 billion investment in chip production facilities, pledging to continue spending in "transitioning to advanced manufacturing processes and upgrading existing production lines to meet rising demand".

The South Korean company said it expects "AI and server demand to continue increasing, leading to more opportunities for structural growth".

- HBM race -

Samsung's strong earnings come as key competitor SK hynix also saw its operating profit double last year to a record high, buoyed by the AI boom.

The two firms are among the world's leading producers of memory chips, supplying high‑performance components that are essential for AI products and the data centres powering the fast‑evolving sector.

SK said on Wednesday its operating profit soared 101 percent to 47.2 trillion won last year.

Riding the AI boom, SK hynix shares have surged around 220 percent over the past six months, while Samsung Electronics has risen about 130 percent.

Both companies are on the cusp of producing next-generation "HBM4" chips for AI data centres, with Samsung reportedly due to start producing them in February.

American company Nvidia will be one of Samsung's customers for HBM4 chips.

But Nvidia has reportedly allocated around 70 percent of its HBM4 demand to SK hynix for 2026, up from the market's previous estimate of 50 percent.

The South Korean government has pledged to become one of the world's top three AI powers, behind the United States and China.

(G.Gruner--BBZ)