Memory chip shortage to boost Samsung's profits by 160% — Reuters. What about the shares?

Samsung Electronics may see a sharp increase in profits amid rapidly rising semiconductor prices caused by supply shortages and frenzied demand from the AI sector, Reuters reports. According to analysts, the surge in memory market prices could deliver the company one of its strongest financial results in recent years.

Samsung Electronics, the world's largest memory chip maker, may report a 160% increase in operating profit in the fourth quarter of 2025, Reuters reports , citing analysts at SmartEstimate from LSEG. According to the agency's sources, the company may achieve these figures amid an acute shortage in the memory chip market, which has led to a sharp rise in prices.

Semiconductor prices have been rising rapidly in recent months: the industry's transition to AI-focused chips has reduced the production of "traditional memory," the agency notes. Meanwhile, demand for chips for training and operating AI models has skyrocketed. All this, according to data from LSEG's SmartEstimate analytics company, could lead to Samsung reporting operating profits of 16.9 trillion won ($11.7 billion) for October to December 2025 this Thursday, January 8. For comparison, a year earlier, this figure was 6.49 trillion won (a 160% year-on-year increase), Reuters notes, emphasizing that for Samsung, this result will be the highest quarterly profit since the third quarter of 2018. At that time, Samsung set a record with a profit of 17.6 trillion won.

SmartEstimate's analysis is based on forecasts from 31 analysts.

On this news, Samsung shares rose 0.6% in South Korean trading, after falling 3.5% during the trading session on January 6. Over the past year, Samsung shares have jumped 125%, posting their highest annual gain in 26 years, Reuters notes.

In addition, according to the agency, in recent weeks, some analysts have raised their estimates of Samsung's operating profit in the fourth quarter of 2025 to more than 20 trillion won ($13.8 billion) amid stronger-than-expected growth in prices for traditional chips. Overall, analysts estimate that Samsung's operating profit could more than double this year to exceed 100 trillion won ($69 billion), as rising semiconductor prices more than offset the slowdown in the company's mobile business.

Prices for one type of DDR5 DRAM memory chip rose 314% in the fourth quarter of 2025 compared to the same period in 2024, according to data from research firm TrendForce, Reuters reports. Analysts expect contract prices for traditional DRAM to rise by another 55-60% in the current quarter compared to the period from October to December 2025.

"As prices for traditional DRAM continue to rise rapidly, Samsung—whose production capacity is largely concentrated in this segment—may benefit relatively more from the current price cycle," noted TrendForce analyst Avril Wu (quoted by Reuters).

DRAM chips are used in servers, computers, and smartphones to temporarily store data and ensure fast and stable operation of programs and applications.

At the same time, BNK Investment & Securities analyst Lee Min-hee said he is cautious about Samsung's stock valuation, as sharp increases in semiconductor prices could weaken demand for PCs and smartphones. He also pointed to "risks of slowing demand" from AI data centers, which are increasingly relying on borrowed funds to finance investments.

On December 26, Nomura analysts raised their target price for Samsung Electronics shares from 150,000 to 160,000 won, maintaining their buy recommendation. Their target implies a 16% increase in the company's shares relative to the closing price on January 5. Of the 35 analysts covering Samsung shares, 32 recommend buying them, two recommend holding them in the portfolio, and only one recommends selling them.

This article was AI-translated and verified by a human editor