Samsung Electronics posted consolidated sales of 93 trillion won and operating profit of 20 trillion won in its preliminary results for the fourth quarter of last year. This is the first time quarterly operating profit has exceeded 20 trillion won. The previous quarterly operating profit record was 17.57 trillion won in the third quarter of 2018, and it was surpassed by about 14%, setting a new record for the first time in 7 years and 4 months.
It is an earnings surprise that far exceeds the market consensus (around 18 trillion won), and analysts say the rebound in the memory semiconductor cycle driven by expanded global artificial intelligence (AI) infrastructure investment has been confirmed in the results.
According to Samsung Electronics on Jan. 8, fourth-quarter 2025 sales rose 8.06% from the previous quarter and 22.71% from a year earlier. Operating profit jumped 64.34% from the previous quarter and 208.17% on-year. On a quarterly basis, it is the highest level since 2018. These preliminary results are estimates prepared under International Financial Reporting Standards (IFRS) as adopted in Korea and were provided for investor convenience as the settlement of account has not yet been completed.
◇ A "record-high" boom led by memory
Memory semiconductors are at the center of this earnings improvement. Although official results by business unit have not yet been disclosed, the industry and the securities community expect the semiconductor (DS) division to have posted sales of around 40 trillion won and operating profit of 15 trillion to 16 trillion won in the fourth quarter, swinging to a large profit from a loss a year earlier. Analysis suggests the DS division likely accounted for more than 70% of total operating profit.
As AI servers spread, shipments of server DRAM surged, while the shift in the production mix toward HBM limited the supply of commodity DRAM, sustaining price strength and driving the earnings improvement. As a result, the operating margin of the DRAM business appears to have recovered to around 50%.
NAND flash also appears to have shed much of its earnings drag. As NAND demand recovered, centered on embedded solid-state drives (eSSD) installed in AI infrastructure, operating losses likely narrowed to under 1 trillion won or approached break-even.
The high bandwidth memory (HBM) business is also cited as a key pillar of DS division earnings improvement. The market expects Samsung Electronics' fourth-quarter HBM-related sales to have expanded to the 6 trillion to 7 trillion won range. The simultaneous effects of increased HBM3E shipments and higher average selling prices (ASP) worked together, and the higher share of value-added products amplified operating leverage.
The rising share of HBM is leading to qualitative improvements across the memory portfolio, interpreted as evidence that the company has entered a phase of structural profitability recovery beyond a simple cyclical rebound. While next-generation HBM4 is not yet at a stage to meaningfully contribute to sales, it is cited as a factor raising expectations for future results.
◇ Non-memory and finished goods recover balance after the bottom
Non-memory and finished goods businesses are also on a gradual recovery path. The System LSI and foundry business units likely posted operating losses of 1 trillion to 2 trillion won in the fourth quarter, but with order growth and process migration effects reflected, the consensus view is that losses narrowed from the previous quarter. The industry also suggests these divisions have entered a recovery phase after passing the bottom.
Despite weak global demand, finished goods businesses such as mobile, home appliances, and TVs appear to have held up well. The mobile (MX) division's fourth-quarter operating profit is estimated at 2 trillion to 3 trillion won, helped by a higher share of flagship products and cost-efficiency gains. Analysts say the higher share of premium models, rather than smartphone unit sales, contributed to improved profitability.
The display and digital appliances (DA) business units also appear to have continued their earnings recovery. Displays likely recorded around 1 trillion won in operating profit on increased OLED panel shipments and reduced cost burdens, while the home appliances business is estimated to have posted a similar level of profit on stronger sales centered on premium products.
With fourth-quarter results confirmed as an earnings surprise that far exceeded market expectations, projections for annual results are also rising quickly. If memory price strength and AI infrastructure investment continue, operating profit is expected to top 100 trillion won for the full year.
Foreign media also described Samsung Electronics' fourth-quarter operating profit surpassing 20 trillion won as a "record turnaround" led by the AI boom. Reuters said memory shortages and AI infrastructure demand pushed up DRAM and HBM prices, allowing Samsung Electronics to achieve its highest-ever quarterly profit.