Samsung's Q4 Profit Expected to Soar 160% Due to AI-Driven Chip Demand

• DDR5 DRAM chip prices jumped 314% in Q4 year-over-year, with conventional DRAM contract prices expected to rise another 55-60% in Q1 2025 due to production shifts toward AI chips and sustained demand across segments
• Samsung is regaining ground in supplying next-generation HBM4 chips to customers including potentially Nvidia, with CEO noting customers said 'Samsung is back' after the company previously lagged rival SK Hynix in high-end AI chip supply
• The chip price surge presents a double-edged sword: analysts project Samsung's 2025 operating profit could exceed 200 trillion won, but soaring component costs are squeezing margins in its smartphone division and may dampen PC and smartphone demand

Samsung Q4 Profit Expected to Surge 160% on AI Chip Demand

Key Financial Projections:

Samsung Electronics is expected to report Q4 operating profit of 16.9 trillion won ($11.7 billion), representing a 160% jump from 6.49 trillion won year-over-year. Some analysts project profits exceeding 20 trillion won, which would mark the highest quarterly performance since Q3 2018's record 17.6 trillion won. Full-year 2025 operating profit is forecast to surpass 200 trillion won.

Market Drivers:

A severe memory chip shortage has dramatically increased prices, driven by surging AI demand and the industry's production shift from traditional to AI-related chips. DDR5 DRAM prices jumped 314% in Q4 year-over-year, with TrendForce projecting conventional DRAM contract prices will rise another 55-60% in Q1 2026. Micron Technology's CEO expects tight memory markets to persist past 2026, with the company able to meet only 50-66% of key customer demand.

Competitive Position:

Samsung is recovering from earlier setbacks against rival SK Hynix in supplying high-end chips to Nvidia. CEO Jun Young-hyun recently stated that customers praised Samsung's next-generation HBM4 (high-bandwidth memory) chips, saying "Samsung is back." The company appears to be gaining market share with Nvidia, whose next-generation Vera Rubin platform incorporating HBM4 chips will launch later this year.

Challenges:

Rising chip prices are squeezing margins in Samsung's smartphone division, its second-largest revenue source. Analysts warn of potential demand slowdowns for PCs and smartphones, plus risks from AI data centers increasingly relying on debt financing.

Announcement Date: Samsung will release official Q4 estimates on Thursday, January 9.