Samsung’s semiconductor rebound took shape in the third quarter of 2025, as the South Korean tech giant reported an operating profit of KRW 12.2 trillion (US$8.6 billion) more than double the previous quarter’s figure ending four straight quarters of decline in its chip division.
The turnaround was led by the Device Solutions (DS) division, which delivered KRW 33.1 trillion in revenue and KRW 7.0 trillion in operating profit, marking a more than tenfold rise from Q2 2025.
Samsung’s Memory Business achieved what it called “record-high quarterly revenue,” fuelled by soaring demand for high-bandwidth memory (HBM3E) and server SSDs, both vital components for AI infrastructure.
But this recovery wasn’t just about favorable market winds. It reflected strategic pivots during the downturn, a market rebound that played to Samsung’s strengths, and competitive pressure that pushed the company to fast-track its AI chip roadmap.
The Road Back from the Slump
Samsung’s current success followed a challenging stretch through 2024 and early 2025. The company faced a severe memory chip oversupply, falling prices, delays in qualifying its HBM products with major clients, and SK Hynix’s early dominance in AI memory chips.
The low point came in Q2 2025, when weak chip profits led analysts to question Samsung’s edge in semiconductor innovation. For the first time, SK Hynix overtook Samsung as the global memory market leader, largely on the strength of its partnership with Nvidia in HBM chips.
According to MS Hwang, research director at Counterpoint Research, the third-quarter rebound was “a clear reflection of a broad memory market boom and rising prices for general-purpose memory.” However, Counterpoint also confirmed that Samsung regained the top spot from SK Hynix in Q3 — suggesting its comeback was driven by more than just improving market conditions.
From Laggard to Leader: The HBM Turnaround
Reclaiming its footing in HBM technology proved central to Samsung’s recovery. The company confirmed that HBM3E is now in mass production and shipping to all major customers, while HBM4 samples are already being sent to key clients.
Reports from late September indicated that Samsung had finally passed Nvidia’s qualification tests for advanced HBM chips — a milestone that had previously eluded it. While Samsung has yet to confirm the news officially, the timing aligns with the surge in HBM sales seen in Q3.
A Samsung executive described the demand environment bluntly:
“Data centre companies are aggressively expanding their hardware investments to secure AI infrastructure. AI-related server demand continues to grow, far exceeding current industry supply.”
That imbalance between supply and demand gave Samsung much-needed pricing power after a year of decline. The company also noted a “favorable price environment” and lower one-off costs, including inventory adjustments, which boosted profitability.
Beyond Memory: Foundry Progress and New Challenges
Samsung’s recovery wasn’t limited to memory. The Foundry Business, which produces chips for external clients, saw a sharp improvement in earnings thanks to lower one-off costs and higher factory utilisation. The division also secured record-high customer orders, mainly for advanced-node products.
The company is ramping up mass production of 2-nanometer Gate-All-Around (GAA) chips — a key technology for competing with TSMC, the global foundry leader. Samsung expects its Taylor, Texas fab to begin operations on schedule in 2026.
Meanwhile, the System LSI Business, responsible for Exynos processors and image sensors, experienced slower growth due to seasonal factors and customer inventory adjustments.
Outlook for 2026
Looking ahead, Samsung expects its semiconductor recovery to continue. The Memory Business will prioritise mass production of HBM4 with “differentiated performance,” while expanding its customer base and manufacturing capacity for 1c process technology to meet projected AI-driven demand.
For Q3 2025, consolidated revenue reached KRW 86.1 trillion, up 15.4% from the previous quarter and 8.9% year-over-year. The Device eXperience segment, which includes smartphones, generated KRW 34.1 trillion, supported by strong sales of the Galaxy Z Fold7 and flagship models.
However, not every division shared in the momentum. Samsung Display posted KRW 8.1 trillion in revenue and KRW 1.2 trillion in operating profit, while the Visual Display business recorded a modest KRW 0.1 trillion loss, citing tough competition despite solid premium TV sales.
A Comeback or Just a Pause?
Samsung’s third-quarter results mark a decisive step out of its semiconductor slump, restoring market confidence after four consecutive quarters of decline. Yet sustaining that momentum won’t be easy. The company still faces fierce competition from SK Hynix in HBM, TSMC in foundry, and growing geopolitical pressures on the global chip supply chain.
For now, Samsung has proven that strategic execution, timely investment, and the explosive growth of AI infrastructure can power even the largest of comebacks. Whether this marks the start of a lasting uptrend or just a temporary reprieve will define the next chapter of its semiconductor story.
