Samsung Leans on AI Memory Boom to Drive Revenue

Samsung reported on Thursday (Jan. 29) its strongest quarter ever in the fourth quarter of 2025, as demand for artificial intelligence (AI) related semiconductors and memory products lifted its bottom line.

Company officials on its earnings call said the results were driven almost entirely by a sharp rebound in semiconductors, where AI-related demand tightened supply and lifted pricing across memory products. By contrast, Samsung’s consumer electronics businesses faced softer demand, rising costs and tariff pressure, highlighting a growing imbalance between AI infrastructure strength and consumer electronics performance.

The Device Solutions division posted a 33% quarter-on-quarter increase in revenue, driven by expanded sales of high-bandwidth memory (HBM), a stacked, high-speed memory technology used in AI servers and accelerators, and other high value-added server products. Memory revenue set a new all-time quarterly record, supported by strong hyperscaler demand and improving market prices.

AI Memory Drives the Turnaround

Memory emerged as the central driver for Samsung. Demand for AI servers significantly exceeded industry supply as hyperscalers accelerated capital spending to secure compute capacity. Low inventory levels and supply constraints allowed pricing to reset sharply higher.

Samsung said DRAM, the primary memory used in servers, saw average selling prices increase about 40% quarter on quarter, while NAND flash storage rose in the mid-20% range, reflecting a product mix increasingly concentrated in server and AI-related applications.

All available HBM production capacity for 2026 is already fully booked, with customer demand still exceeding supply. Samsung expects HBM sales to more than triple year over year in 2026, underscoring both the scale of the opportunity and the persistence of supply constraints.

At the same time, the company cautioned that limited clean-room availability and long lead times for advanced processes will constrain supply growth through 2026 and into 2027, raising execution risk as capital spending ramps.

Devices Face Slower Growth and Rising Costs

Outside semiconductors, results were mixed. Smartphone shipments totaled 60 million units in the quarter, with an average selling price of $244. Revenue and profit declined sequentially as the impact of new model launches faded, despite year-over-year growth in flagship and foldable devices.

Home appliances and TVs continued to face weak global demand and pricing pressure, partially offset by higher-end products such as OLED, QLED and large-format displays. Advertising and content services tied to Samsung’s TV platform continued to grow but remain incremental relative to hardware revenue.

What Else Stood Out on the Call

Samsung highlighted a wave of new consumer hardware and AI features aimed at including the TriFold smartphone, the Galaxy S26 series launching in the first half of 2026 as well as plans for next-generation augmented reality glasses designed to deliver immersive, multimodal AI experiences.

In home and living room devices, Samsung pointed to Micro RGB TVs in sizes ranging from 55 to 130 inches as a potential new premium category, alongside the rollout of Vision AI Companion for televisions and broader Galaxy AI expansion across watches, earbuds, tablets and notebooks.

The company acknowledged that supply constraints, particularly in advanced memory and clean-room capacity, are expected to persist into 2027, limiting near-term flexibility despite strong demand visibility.

Rising memory prices were flagged as both a tailwind and a headwind, boosting semiconductor profitability while increasing cost pressure on downstream device businesses, as Samsung also pointed to trade barriers, tariffs and geopolitical uncertainty as ongoing risks in 2026.

Topline Results

Samsung closed the quarter with record revenue of KRW 93.8 trillion ($65.4 billion) and operating profit of KRW 20.1 trillion ($14 billion), supported by a 21.4% operating margin, according to its earnings report.

Capital expenditures (CapEx) jumped to KRW 20.4 trillion ($14 billion) in the fourth quarter, bringing full-year CapEx to KRW 52.7 trillion ($36.8 billion), with the majority directed toward memory and advanced process nodes. Currency movements added approximately KRW 1.6 trillion to operating profit.

The quarter marked a clear recovery for Samsung, but it also reinforced a growing dependence on AI-driven memory demand at a time when consumer electronics remain under pressure and capacity expansion carries heightened cycle risk.