Samsung bets big on AI memory demand amid record turnaround

• Growing customer interest has prompted Samsung to consider further enlarging its production footprint for 2026

After months of trailing competitors in the booming AI chip space, Samsung Electronics delivered a message of bold confidence to investors and the chip industry on Thursday.

Fresh off a record quarter for its memory division, the world’s largest memory chipmaker is retooling its strategy and capital spending to chase runaway demand—particularly in the high-bandwidth memory (HBM) segment that powers the world’s AI infrastructure.

A major pivot

Just a year ago, Samsung’s memory business was posting lacklustre results, squeezed by slow smartphone and PC demand. But data centres and generative AI fever have upended the market equation.

The company’s memory operations notched a record 26.7 trillion won in revenue (up from 22.3 trillion won a year earlier), helping drive an 80 per cent jump in quarterly chip operating profit to 7 trillion won ($4.92 billion). Shares responded, surging as much as 5.3 per cent—strongly outpacing the broader KOSPI index.

Meeting demand—if they can

In a post-earnings call, Samsung memory executive Kim Jaejune set the tone for the company’s next act: “Customers’ demand for [next year] will exceed our supply, even considering our investment and capacity expansion plan.”

He described “much stronger and faster than usual” memory demand, signaling both continued price momentum and the risk of persistent supply constraint—particularly as the entire industry pivots resources to the AI chip surge.

For 2025, Samsung is betting on a “significantly expanded” production of HBM chips—including current-generation HBM3E now being shipped to all major customers, and the next-generation HBM4, for which Samsung has already begun sampling with key clients.

Growing customer interest has prompted Samsung to consider further enlarging its production footprint for 2026.

Samsung’s bullish stance mirrors that of rival SK Hynix, which declared its own HBM inventory fully sold out for next year and predicted an “extended chip super cycle” powered by surging AI infrastructure investment.

Meanwhile, demand for commodity memory—including for mobile and PC applications—remains tight. Kim warned that supply constraints on these traditional segments could persist well into next year, compounding the sector’s focus shift toward premium AI chips.

Industry implications

While giants like OpenAI and other tech titans unveil multi-billion-dollar AI infrastructure projects, questions linger about the sustainability of the AI boom—and whether the current fever will give way to a dramatic cooling period.

Still, for now, both Samsung and its shareholders are relishing the rebound, as the firm makes up for its slower start bringing advanced HBM chips to market, working to close the gap with front-runner SK Hynix.

With HBM4’s mass production on the agenda for next year, and Samsung actively reviewing additional expansion in response to surging orders, industry dynamics in 2026 and beyond are set for another shakeup.

For now, the company’s turnaround story and future roadmap signal that the race for AI memory dominance is far from over—and the stakes are only getting higher.