Samsung Warns Chip Shortage Will Squeeze Mobile Growth
Synopsis
Samsung’s Q4 profit triples to record KRW 20T on AI memory boom, but chip shortages weigh on mobile growth. Samsung posted a strong fourth-quarter performance, with profit nearly tripling to a record KRW 20…
Samsung’s Q4 profit triples to record KRW 20T on AI memory boom, but chip shortages weigh on mobile growth.
Samsung posted a strong fourth-quarter performance, with profit nearly tripling to a record KRW 20 trillion. But even as the results surged, management struck a cautious note.
CEO TM Roh said on January 29 that the global rush into artificial intelligence is tightening supplies of high-bandwidth memory, creating shortages that could slow growth in Samsung’s mobile business. Demand for advanced HBM3E and HBM4 chips remains intense as AI and data-centre spending accelerate.
The company’s chip division was the strongest performer, posting record revenue and profit on sharply higher memory prices and strong demand from major AI chip customers. The picture was less rosy in smartphones, where profit slipped nearly 10% as competition intensified and relaunch costs climbed.
Looking ahead, Samsung expects a solid start to the year, supported by continued AI and server demand and upcoming AI-focused smartphone launches.
Memory Boom Powers Record Earnings
Samsung’s chip business surged at the end of the year, posting a profit of KRW 16.4 trillion, more than five times higher than a year earlier, as production of its advanced HBM3E memory accelerated.
The momentum is set to continue, with Samsung preparing to begin mass shipments of its 11.7Gbps HBM4 chips in February for Nvidia’s next-generation Rubin platform. Memory prices rose sharply in the fourth quarter and are expected to increase further in early 2026.
Although Samsung still lagged SK hynix in full-year chip profits, it pulled ahead in the fourth quarter, helped by a wave of late HBM3E deliveries that boosted results at year-end.
Mobile Division Feels Supply Pinch
Samsung’s smartphone business came under pressure as intense competition and tighter pricing squeezed profits, offsetting solid sales of its flagship devices.
Shortages across the supply chain pushed consumer electronics prices higher, dampening demand. With AI products delivering stronger returns, the company has shifted manufacturing capacity toward higher-margin AI chips, leaving less room for mobile components.
2026 Supply Constraints Persist
Samsung is keeping a tight lid on capacity expansion over the next two years, with booming AI demand soaking up production and limiting room for aggressive growth.
To stay ahead of rivals such as SK hynix and Micron, the company is focusing on premium products and pushing forward with its 2-nanometre manufacturing plans. Samsung shares slipped 1.2% after the results, reflecting investor concerns over rising costs in its mobile and display businesses.
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