Written by Hyunju Jin and Joyce Lee
SEOUL, Jan 29 (Reuters) – Samsung Electronics said its operating profit more than tripled in the fourth quarter to a record high, and that demand for chips is expected to continue to be strong as the race to develop artificial intelligence tightens supply and raises prices.
The results highlight the world’s top memory chipmaker’s strong pricing power, with profit growth expected to accelerate this year.
“Due to the ongoing AI boom, we expect the industry-wide favorable market environment to continue in the first quarter of 2026,” Samsung said in a statement.
But it warned that rising memory chip prices were weighing on its smartphone and display businesses, and other risks remained, including global tariffs.
The company’s operating profit for the October-December period was 20 trillion won ($13.98 billion), in line with expectations of 20 trillion won and up from 6.49 trillion won in the same period last year.
The company reported sales of 93.8 trillion won for the quarter, an increase of 24% year-on-year.
Operating profit in the chip business, Samsung’s main cash cow, hit a record high of 16.4 trillion won in the fourth quarter, an increase of 470% year-on-year, but profits in the mobile phone business fell to 1.9 trillion won, squeezed by soaring chip prices.
Samsung said its mobile business is expected to face rising cost pressures this year. Samsung co-CEO TM Roh said in an interview with Reuters that the severe chip shortage is “unprecedented,” adding that he did not rule out price hikes.
Profit from the display business more than doubled to 2 trillion won due to strong sales of Apple’s main customer, Apple’s iPhone 17 series.
The display business expects smartphone demand to weaken this quarter due to price hikes due to memory chip supply shortages, and expects customers to demand price cuts.
HBM Chip for NVIDIA
Samsung Electronics announced on Thursday that it plans to begin shipping its next-generation high-bandwidth memory (HBM) chip (HBM4) this quarter. Analysts expect the chips to be shipped to Nvidia first.
Samsung is trying to catch up with out-of-town rival SK Hynix, a major supplier of advanced memory chips essential to Nvidia’s AI accelerators, after facing supply delays that hit the company’s revenue and stock price last year.
SK Hynix announced on Thursday that large-scale production of its next-generation HBM is underway to meet customer demand, after recording a record profit that more than doubled in the fourth quarter.
