Samsung Forecasts Highest Profit in Three Years, on High Memory Chip Demand

Samsung Electronics has projected an operating profit of ₩12.1 trillion ($8.5 billion) for the third quarter of 2025, its strongest in more than three years, driven by a surge in demand for conventional memory chips.

The South Korean tech giant’s projected earnings are set to beat market expectations by over ₩2 trillion, with analysts attributing the surprise to high prices of DRAM and NAND chips, both essential for servers and consumer devices. 

According to data from TrendForce, DRAM prices climbed 171.8% year-on-year, driven by a drawdown in chip inventories and increased demand from data centres and AI infrastructure.

Analysts say the global rush to build data centres for artificial intelligence has created a bottleneck in the supply of traditional memory chips. With manufacturers focusing investment on high-bandwidth memory (HBM) for AI workloads, the production of commodity memory has fallen behind, giving Samsung an advantage in pricing and supply.

“The third-quarter earnings surprise came from the chip business,” said Ryu Young-ho, senior analyst at NH Investment & Securities. “Strong demand for conventional memory to support general-purpose servers, combined with robust HBM demand for AI servers, have together fuelled overall memory demand.”

Samsung’s total revenue is expected to rise 8.7% year-on-year to a record ₩86 trillion, aided by the weaker South Korean currency and improved utilisation across its manufacturing plants. 

Analysts also noted smaller losses in its foundry unit, which produces logic chips, as better capacity use helped offset fixed costs.

Although Samsung is the world’s largest memory chipmaker, it is facing competition in advanced AI chips. Earlier this year, rival SK Hynix overtook Samsung in DRAM market share and has led shipments of next-generation HBM3E chips to Nvidia. 

Samsung, however, has begun supplying its own 12-layer HBM3E chips to Nvidia, albeit in limited quantities, and is betting heavily on HBM4 technology to regain its lead.

In a recent report, Morgan Stanley said Samsung “is on track with next-generation HBM4 development, working closely with major U.S. customers,” adding that commercial shipments are expected to begin in 2026.

Meanwhile, Samsung is expanding its internal incentive programmes. A company memo dated 14 October revealed plans to introduce a performance-linked stock compensation plan for all South Korean employees over the next three years, an extension of benefits previously reserved for senior executives.

Despite its strong showing, the company faces external risks. Analysts warn of potential U.S. tariffs on consumer electronics, China’s export restrictions on rare earth materials critical for chip production, and the broader U.S.–China trade tensions, all of which could disrupt supply chains and demand.

“Samsung is a big beneficiary of growing demand for commodity chips,” said Sohn In-joon, an analyst at Heungkuk Securities, who credited the profit surge to unexpectedly strong memory prices and disciplined inventory management across the sector.

With tech giants such as Tesla, OpenAI, and Microsoft expanding their AI infrastructure, analysts expect the current supply shortage in memory chips to continue well into 2026. 

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