Samsung, SK hynix profit projected to near $68 billion each in 2026 on AI supercycle

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Samsung, SK hynix profit projected to near $68 billion each in 2026 on AI supercycle

Published: 21 Dec. 2025, 15:49 Updated: 22 Dec. 2025, 13:46

LEE JAE-LIM
[email protected]

Audio report: written by reporters, read by AI

Samsung Electronics' Seocho office building in southern Seoul [YONHAP]

[NEWS ANALYSIS]

Sentiment toward Korea’s top chipmakers is decisively turning bullish, as Samsung Electronics and SK hynix are widely expected to post unprecedented operating profits nearing 100 trillion won ($68 billion) each next year. A sustained semiconductor upcycle, coupled with Micron’s record-high results, is fueling confidence that the rally still has significant room to run.

Analysts are predicting fourth-quarter operating profits of the two chipmakers to each exceed at least 15 trillion won from robust memory chip demand, as well as price hikes from conventional dynamic random-access memory (DRAM) and NAND flash chips. The figure is a record high for SK hynix and Samsung’s first comparable performance in three years, after the company posted 15.8 trillion won during the chip upcycle in the third quarter of 2021.

Annually, Daishin Securities and Kiwoom Securities forecast Samsung Electronics’ operating profit in 2026 at 110 trillion won and 107.6 trillion won, respectively. Over the same period, iM Securities and Mirae Asset Securities each project SK hynix’s operating profit to reach 93.8 trillion won and 91.1 trillion won.

Micron earnings quell AI bubble fears

Micron’s December earnings serve as an early benchmark for the semiconductor cycle in the year ahead. Strong sales and an assured outlook from CEO Sanjay Mehrotra helped soothe AI bubble fears that had been stoked by weaker forecasts from Broadcom and Oracle.

Micron’s consolidated earnings for the fiscal year of 2026, from September to November, saw revenue surge by 56 percent to $13.6 billion, above the market consensus of $13 billion. Adjusted earnings per share also came in at $4.78, beating the consensus estimate of $3.95. Revenue posted double-digit growth across all business segments, including cloud memory and data centers.

Micron said memory demand far outpaces supply as Big Techs ramp up investment in AI data centers. The company has already finalized pricing and volume agreements for next year’s high bandwidth memory (HBM), including HBM4, effectively selling out its 2026 output and leaving it unable to fully satisfy surging demand.

Mehrotra projects the global HBM market size to reach $100 billion in 2028 from 2025’s $35 billion, noting that the $100 billion milestone is now expected to be reached two years earlier than previously forecast.

SK hynix's next-generation high-bandwidth memory chips displayed at the 27th Semiconductor Exhibition held at Coex in Gangnam District, southern Seoul, on Oct. 22. [YONHAP]

“In the medium term, we are only able to meet about 50 percent to two-thirds of our demand from several key customers,” Mehrotra said at the online conference call. “In this environment, the gap between the demand and supply for all of DRAM, including HBM, is really the highest that we have ever seen.”

AI chip demand is further rising as Big Tech companies such as Google, Amazon and Microsoft begin to develop custom-designed chips, known as application-specific integrated circuits (ASIC), to counter Nvidia’s processors. Against this backdrop, KB Securities said that orders for HBM3E from ASIC developers are surging, adding that Samsung is expected to be one of the biggest beneficiaries of rising HBM and DRAM prices.

SK hynix headquarters in Icheon, Gyeonggi [YONHAP]

“HBM4 demand is forecast to rapidly absorb HBM3E demand from the third quarter of next year,” analyst Kim Dong-won said. “Samsung and SK hynix will supply more than 90 percent of global HBM4 demand, cementing the view that the long-term upcycle in the memory market is only just beginning.”

Forecasts from foreign securities firms are even more optimistic. Morgan Stanley projects Samsung’s operating profit next year at 116.4 trillion won, while Nomura Securities estimates SK hynix’s operating profit at 99 trillion won.

Concern persists over a burst

Still, enthusiasm over the current upcycle is clouded by investor unease about the uncertain payoff timeline for costly AI investments. Those concerns have been sharpened by recent earnings-related disappointments at major AI infrastructure beneficiaries, including Oracle and Broadcom, which markets increasingly view as early warning signals rather than isolated setbacks.

Samsung Electronics' next-generation high-bandwidth memory chips displayed at the 27th Semiconductor Exhibition held at Coex in Gangnam District, southern Seoul, on Oct. 22. [YONHAP]

Oracle’s weaker-than-expected earnings, delays in data center construction and growing questions over the profitability of large-scale AI infrastructure projects have intensified fears of ballooning AI investment costs and eroding returns. Following the earnings report, Oracle shares plummeted 10.83 percent on Dec. 11 compared to the day before, which further dipped after news that Blue Owl Capital, a major investor, withdrew from a $10 billion data center funding deal.

Oracle has pushed back the completion dates for some of the data centers that it’s contracting from OpenAI to 2028, according to Bloomberg, although a spokesperson denied the matter, saying the projects are still on track.

The projects are part of a landmark $300 billion cloud computing contract formed between Oracle and OpenAI in September. Risks, however, have persisted about the high costs of data center construction and Oracle’s financial reliance on OpenAI as a major customer.

Broadcom shares dropped 11.43 percent on Dec. 12 compared to the day before after CEO Hock Tan declined to provide a clear AI revenue outlook for 2026, citing uncertainty around order visibility.

“It's hard for me to pinpoint what 2026 is going to look like precisely,” Tan said. “I'd rather not give you guys any guidance.”

For memory suppliers such as Samsung Electronics and SK hynix, these developments could be seen as signs of broader risks to the semiconductor cycle, particularly if AI investment growth becomes more selective or slows at the margin. Analysts also warn that elevated DRAM prices, the risk of U.S. tariffs on semiconductors and a possible slowdown in China’s economy and IT demand could weigh on the cycle in the second half of 2026.

“Rising memory costs may also prompt electronics makers to raise device prices, which could ultimately curb demand and lead to lower memory content per unit and reduced DRAM orders,” iM Securities analyst Song Myung-seob said.

BY LEE JAE-LIM [[email protected]]