Samsung’s fourth-quarter profit triples, beats estimates as AI chip demand fuels memory shortage

Samsung Electronics announced a remarkable over threefold surge in fourth-quarter profits on Thursday, surpassing analysts’ expectations due to a memory chip shortage and strong demand for artificial intelligence servers.

Key highlights of Samsung’s fourth-quarter results compared to LSEG SmartEstimate:

• Revenue: 93.8 trillion Korean won ($65.58 billion) vs. 93.318 trillion won expected
• Operating profit: 20.1 trillion won vs. 20.018 trillion won expected

The quarterly revenue of the South Korean tech giant surged by approximately 24% year over year, reaching a new record. Additionally, the operating profit saw a remarkable increase of over 200% compared to the previous year.

The profits exceeded Samsung’s previous record of 17.6 trillion won set in the third quarter of 2018, aligning with Samsung’s own guidance of around 20 trillion won.

Being South Korea’s largest company by market capitalization, Samsung is a prominent provider of memory chips, semiconductor foundry services, and smartphones.

The company attributed its strong earnings to the performance of its memory business, achieving record quarterly revenue and operating profit driven by market price surges, sales of high-bandwidth memory, and other high-value-added products.

High-bandwidth memory (HBM) has been a focus area for Samsung, particularly in AI data centers, with demand outpacing supply. This has led to a shortage in the market, boosting chip prices for personal computers and mobile devices.

This favorable market condition has benefitted memory giants like Samsung and its competitor SK Hynix, which also reported record earnings recently.

Stay tuned for more updates on this breaking news.