Samsung has lost to SK Hynix for the first time in terms of annual profits

Samsung Electronics, East Asia's second-largest company by market value after TSMC, has lost to SK Hynix for the first time in terms of operating profit for the year. The companies have roughly equal market shares of traditional memory chips for servers and PCs. At the same time, SK Hynix is significantly ahead of Samsung in supplying high-margin memory for artificial intelligence. Analysts consider the shares of both manufacturers to be extremely attractive against the backdrop of severe shortages, and a market redistribution is unlikely.

On Jan. 29, Samsung reported a threefold increase in operating profit for the fourth quarter of 2025 to a record 20.1 trillion won ($14 billion) from 6.5 trillion won a year earlier. According to Reuters, the figure matched the consensus forecast. In particular, quarterly profits from chip sales - the company's main source of revenue - jumped 470% to a record 16.4 trillion won. Samsung's profit from sales of mobile devices, on the other hand, fell 10% to 1.9 trillion won due to a sharp rise in component prices.

Overall, Samsung's operating profit for 2025 reached 43.6 trillion won ($30 billion). In this indicator, the technology giant for the first time lost to its main competitor, states CNBC: South Korean SK Hynix, the main supplier of memory chips for Nvidia, a day earlier reported an annual profit from sales of 47.2 trillion won ($33 billion).

Samsung shares jumped at the opening of trading in Seoul, but ended the session down 1%. Reuters attributes this drawdown to Samsung's warning that the sharp rise in the price of memory chips increases the company's costs to produce smartphones and displays for its own needs and for orders from customers, including Apple. SK Hynix shares ended trading up 2.4%.

According to Counterpoint Research's end-of-2025 estimates, in the third quarter of 2025, Samsung held 33% and SK Hynix 34% of the global traditional RAM (DRAM) market. Meanwhile, SK Hynix continued to hold a strong lead in sales of high-speed HBM memory for AI, with 57% versus Samsung's 22%. The third major memory chip manufacturer is the US-based Micron.

As long as there remains a gigantic shortage of memory chip supply, there will be no noticeable redistribution in this market, according to William Blair analyst Sebastien Nagy. Although Samsung is going to be the first to produce HBM memory for Nvidia's next-generation Vera Rubin AI gas pedals, Nvidia will receive about 70% of these chips in 2026 from SK Hynix under existing contracts, South Korean agency Yonhap notes.

Consensus rating of Samsung shares, calculated by MarketScreener according to the estimates of 35 analysts - "buy" (Buy). Experts give the same recommendation for SK Hynix securities. Average target prices assume growth of quotations of Samsung on 7,2 %, SK Hynix - on 2,8 % in the nearest year.

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