Samsung Electronics has staged a powerful comeback in its semiconductor business, ending four straight quarters of decline thanks to surging global demand for artificial intelligence (AI) hardware. The South Korean tech giant reported an operating profit of KRW 12.2 trillion (US$8.6 billion) in the third quarter of 2025 — more than double the previous quarter’s figure — marking a decisive turnaround driven by its Device Solutions division.
The division, which houses Samsung’s memory and foundry businesses, delivered KRW 33.1 trillion in revenue and KRW 7.0 trillion in operating profit, a tenfold increase from the second quarter. The surge was largely powered by record-breaking sales of high-bandwidth memory (HBM3E) chips and server solid-state drives (SSDs) — critical components fueling the infrastructure behind AI systems.
Strategic Shifts Pay Off After a Prolonged Slump
Just a year ago, Samsung’s chip unit was struggling. A global memory chip glut had driven prices down, while rival SK Hynix captured early dominance in the AI memory market by securing major supply deals with Nvidia. At the time, Samsung’s delayed product qualifications and rising inventory costs sparked concerns about its competitiveness.
That narrative has now flipped. Analysts at Counterpoint Research called Samsung’s Q3 performance “a clear result of a broader memory market boom,” but also pointed out that the company reclaimed the top spot in the global memory market from SK Hynix — proof that Samsung’s recovery runs deeper than market momentum alone.
From Lagging to Leading in AI Memory
Samsung’s success in ramping up production of its latest HBM3E chips has been key to its rebound. The company confirmed that HBM3E is now in full mass production and being shipped to “all related customers.” Early samples of the next-generation HBM4 chips are also being delivered to major clients, keeping Samsung in step with the AI race.
In late September, industry reports indicated that Samsung had finally passed Nvidia’s qualification tests for advanced HBM products — a milestone that had previously eluded it. Though Samsung hasn’t publicly confirmed the Nvidia qualification, the timing aligns closely with its sharp increase in chip sales.
“Data centre companies are continuously expanding their hardware investment because of the ongoing competition to secure AI infrastructure,” a Samsung executive said during the company’s earnings call. “Our AI-related server demand keeps growing, and this demand significantly exceeds industry supply.”
That tight supply has given Samsung long-awaited pricing power. The company cited a “favourable price environment” and a sharp reduction in one-off costs such as inventory adjustments as major contributors to its strong results.
Foundry Gains and Lingering Challenges
Beyond memory, Samsung’s Foundry Business — which manufactures chips for other firms — also reported “significant improvement” in earnings during the quarter. The unit achieved record-high orders, mainly for advanced nodes, and improved factory utilization.
Samsung is now scaling up mass production of 2-nanometer Gate-All-Around (GAA) technology to better compete with market leader TSMC. The company said its new fab in Taylor, Texas, remains on track to begin operations in 2026.
However, not all segments performed equally well. The System LSI Business, which designs Exynos processors and image sensors, saw weaker results due to seasonal demand fluctuations and customer inventory adjustments. Meanwhile, Samsung’s Visual Display division reported a small operating loss despite solid sales of premium TVs, reflecting ongoing competition in the consumer electronics market.
Looking Ahead: Sustaining the Momentum
Samsung expects continued strength in AI-driven demand heading into 2026. The company plans to expand production of HBM4 chips and increase capacity for its 1c process to keep pace with the accelerating data center buildout. Consolidated revenue for the quarter reached KRW 86.1 trillion, up 15.4% from the previous quarter and 8.85% year-over-year.
The company’s smartphone unit, bolstered by the Galaxy Z Fold7 launch and strong flagship sales, contributed KRW 34.1 trillion in revenue, while Samsung Display posted KRW 8.1 trillion in revenue and KRW 1.2 trillion in profit.
After a year of setbacks, Samsung’s return to form underscores how strategic patience and decisive execution can turn market adversity into opportunity. Whether the company can sustain this trajectory amid fierce competition from SK Hynix and TSMC — and broader geopolitical uncertainty in the chip sector — remains the question for 2026.
For now, Samsung has shown that the AI era isn’t just reshaping technology — it’s rewriting the fortunes of the companies powering it.
