Samsung Electronics Co. Ltd. is expecting to cash in big time on the artificial intelligence chip bonanza, forecasting a three-fold increase in its fourth-quarter operating profit thanks to surging demand for memory chips.

Samsung’s preliminary fourth-quarter earnings forecast underscores the dramatic increase in memory chip prices as manufacturers scramble to keep up with intense demand. The chips are vital components of AI servers, and are also used in personal computers and smartphones.

The company, which is the world’s largest maker of memory chips, said it estimates its operating profit will reach 20 trillion won (around $13.82 billion) for the period ending December, surpassing the analyst forecast of 18 trillion won. One year earlier, it recorded an operating profit of just 6.49 trillion won. The number represents a new quarterly record for Samsung, surpassing the 17.6 trillion won operating profit it recorded in the third quarter of 2018.

Samsung, which is also the world’s leading smartphone and TV manufacturer, said it also anticipates quarterly revenue of 93 trillion won, up 23% from the same period last year. The company’s stock, which has risen 155% in the past 12 months, gained more than 2% in early morning trading in Korea.

Together with its main competitors SK Hynix Inc. and Micron Technology Inc., Samsung has struggled to keep up with the relentless demand for memory chips, and all three companies have plans to build more fabrication plants to expand their production capacity. At CES 2026 this week, Nvidia Corp. Chief Executive Jensen Huang highlighted the unparalleled demand his company is seeing for semiconductors, and said that the world is going to need to build many more chip fabs to keep up. “The reason for that is because of this new industry called AI factories,” he said. “The demand out there is really, really terrific. It’s a good time to be a semiconductor manufacturer.”

This week, a report by Macquarie Equity Research forecast the global market for dynamic random-access memory or DRAM chips to grow to $311 billion this year, roughly six times bigger than what it was in 2023. Meanwhile, data from TrendForce, which tracks the DRAM market, said contract prices were up 313% in the fourth quarter compared to the same period one year earlier. It expects DRAM prices to increase by up to 60% in the current quarter. DRAM chips are key components of computer products, used to temporarily store data needed by whatever applications they’re running.

Although the company has not yet provided a detailed breakdown of its financial results, analysts told the Wall Street Journal that the semiconductor business is expected to account for about 17 trillion won of Samsung’s operating profit. They also forecast good times ahead for the company, especially in its nascent high-bandwidth memory chip business, which is expected to be in high demand from customers including Nvidia. HBM chips are widely used in AI servers, and Samsung has only just managed to enter this market after previously struggling to finalize the development of its products.

Holger Mueller of Constellation Research told SiliconANGLE that Samsung’s forecasts do not come as a surprise, because the AI industry has become the gift that keeps on giving for just about anyone who’s involved in supplying data centers. “Samsung is being rewarded for its endeavors, and the longtime ‘trouble-child’ that is its memory chip business is now rising to the top thanks to incredible demand,” he added.

However, there could be a few bumps in the road for Samsung in 2026, as the high price of memory chips could yet result in reduced demand for products such as smartphones and PCs, as many manufacturers are likely to try and pass these increased costs onto consumers.

Analyst Seo Seung-yeon of DB Securities told Yonhap News that revenue in Samsung’s mobile business is likely to decline this year due to higher component costs. However, he also expects to see growth in Samsung’s display business, thanks to robust sales of Apple Inc.’s iPhone 17 smartphones.

Samsung will release its full fourth-quarter results and a detailed breakdown of its earnings on Jan. 29.

Photo: Samsung Electronics