AI Demand Revives Samsung’s Semiconductor Business with 80% Profit Jump

Samsung Electronics Co.’s semiconductor division reported an impressive 80% increase in profit, surpassing expectations and signaling that surging global demand for artificial intelligence (AI) technologies is fueling a rebound in the company’s core business.

Competing with SK Hynix Inc. and US-based Micron Technology Inc., Samsung announced plans to begin large-scale production of next-generation high-bandwidth memory (HBM4) in 2025, which will be designed to work alongside Nvidia Corp.’s AI accelerators. The company reaffirmed SK Hynix’s forecast that strong AI-related investment will continue through the current quarter and into the next year. Samsung’s shares rose 3.6% in Seoul following the announcement.

After losing ground to SK Hynix in the high-performance memory sector crucial for AI computing, Samsung is now working to regain its leadership position. Tech giants such as OpenAI and Meta Platforms Inc. are investing heavily in expanding AI infrastructure, and Samsung aims to capitalize on this momentum with a planned capital expenditure of 47.4 trillion won ($33 billion) in 2025 to enhance and expand its production capacity.

According to Sanjeev Rana, head of research at CLSA Securities Korea, the demand for both advanced and conventional memory remains strong, while supply continues to lag behind. He noted that the upward trend in DRAM and NAND prices is likely to persist for several more quarters.

For the September quarter, Samsung’s chip unit posted an operating profit of 7 trillion won, well above analysts’ projections of 4.7 trillion won. The company achieved record quarterly revenue in its memory segment, driven by robust sales of HBM3E chips. Overall net income rose to 12.01 trillion won, exceeding market expectations of 9.29 trillion won. The semiconductor division’s operating margin expanded significantly to 21.1% in the third quarter from 1.4% in the second, and the company anticipates further margin growth in the final quarter of the year. Rising prices for DRAM and NAND products, along with increasing shipment volumes, are expected to bolster results, while the foundry business is set to benefit from higher demand for smartphone processors.

Investors are increasingly optimistic about Samsung’s ability to leverage its scale to strengthen its position in the high-bandwidth memory market. In the third quarter, the company regained its status as the world’s top memory maker by revenue, driven by heightened AI-related spending that boosted both prices and volumes for DRAM and NAND products, according to Counterpoint Research. The Suwon-based manufacturer recently secured a contract with Advanced Micro Devices Inc. and is awaiting final approval from Nvidia for its HBM3E and next-generation HBM4 chips. Additionally, Samsung has entered an agreement to supply chips for OpenAI’s Stargate project, further underscoring its growing role in the AI hardware ecosystem.