Samsung Electronics announced on Thursday that its operating profit for the fourth quarter is expected to triple compared to last year, reaching an all-time high. The surge is being driven by limited supply and rapidly increasing demand for memory chips fueled by the growth of artificial intelligence, which has pushed prices sharply upward.

The strong results reflect how semiconductor manufacturers are racing to keep up with demand for memory chips used in data servers, personal computers, and mobile devices that support AI technologies. Samsung, the world’s largest producer of memory chips, estimated its October–December operating profit at 20 trillion won (about $13.82 billion), surpassing market expectations of 18 trillion won and far exceeding the 6.49 trillion won recorded a year earlier. This marks the company’s highest quarterly profit ever, beating its previous peak of 17.6 trillion won set in 2018.

Samsung’s share price ended the session down 1.6% after earlier rising as much as 2.5% to a record high, following a massive 155% gain over the past year as investors locked in profits. Major memory chip producers, including SK Hynix and Micron Technology, are struggling to satisfy booming demand and are expanding manufacturing capacity. Nvidia CEO Jensen Huang, speaking at the Consumer Electronics Show in Las Vegas, said the rise of AI is creating the need for more semiconductor factories and described current demand as exceptionally strong.

Market researchers forecast that the global DRAM market will more than double to $311 billion by 2026, nearly six times its size in 2023. DRAM chips play a critical role in servers, computers, and smartphones by temporarily storing data and enabling fast program performance. According to TrendForce, contract prices for certain DRAM products jumped more than 300% in the fourth quarter compared to last year and are expected to rise another 55% to 60% in the current quarter.

Samsung also anticipates its revenue will climb 23% year-on-year to a record 93 trillion won. Analysts estimate that the semiconductor division will generate the majority of this profit, contributing about 17 trillion won in the fourth quarter alone. Strong memory prices are expected to offset weaker growth in Samsung’s mobile business, which faces challenges from rising component costs.

While analysts remain optimistic about Samsung’s earnings outlook, citing continued memory shortages and expanding data center investment through 2026, some warn that higher memory prices could reduce demand and compress profit margins for data centers, PCs, and smartphones. Samsung’s mobile division is expected to see profit decline due to higher component costs, while its display business is likely to benefit from strong sales of Apple’s upcoming iPhone models.

Samsung executives acknowledged that rising memory costs could eventually lead to higher product prices. Meanwhile, analysts see strong future growth for Samsung’s high-bandwidth memory business, particularly from 2026 onward, supported by demand for advanced AI chips. Samsung plans to release its detailed earnings report, including performance by business segment, on January 29.