Samsung’s semiconductor recovery took shape in the third quarter of 2025, with the South Korean tech giant posting an operating profit of 12.2 trillion won (US$8.6 billion), more than double the previous quarter, ending four consecutive quarters of declining profits in its chip division.
At the center of the turnaround was Samsung’s device solutions division, which reported sales of 33.1 trillion won and operating profit of 7.0 trillion won, an increase of more than 10 times from the June quarter.
The memory business achieved what Samsung described as its “best quarterly revenue ever”, driven by increased sales of high-bandwidth memory (HBM3E) chips and server solid-state drives, which are critical components of artificial intelligence infrastructure.
But it wasn’t just a case of a rising tide lifting all boats. Samsung’s semiconductor recovery reflects a calculated strategic shift during the recession, market dynamics that ultimately turned in its favor, and intense competitive pressures that forced the company to accelerate its AI chip roadmap.
The road to recovery from a slump
Samsung’s path to this quarter’s results started elsewhere. In 2024 and early 2025, the company faced multiple headwinds. It saw prices collapse due to an oversupply of memory chips, delays in qualifying HBM products to major customers, and rival SK Hynix gaining early leadership in AI memory chips.
The low point came in the second quarter of 2025, when Samsung’s chip division reported an operating profit and analysts questioned whether Samsung had lost its technological edge. SK Hynix has taken the top spot in the memory market for the first time, boosted by its early success supplying HBM chips for Nvidia’s AI accelerators.
MS Hwang, research director at Counterpoint Research, described Samsung’s third-quarter performance as “a clear result of the broader memory market boom and general-purpose memory price increases.”
But Hwang’s company also noted that Samsung regained the top spot in the memory market from SK Hynix during the third quarter, suggesting that the semiconductor recovery involves more than just favorable market conditions.
HBM: From later development to mass production
Samsung’s ability to reverse HBM’s fortunes proved central to its turnaround. The company confirmed that the HBM3E is currently “in mass production and on sale to all relevant customers,” while samples of the HBM4 are “simultaneously being shipped to major customers.”
In late September, reports surfaced that Samsung had passed NVIDIA’s certification tests for advanced high-bandwidth memory chips, but the company had missed this important milestone for months. Although Samsung has not publicly acknowledged Nvidia’s qualifications, the timing coincides with HBM’s sales acceleration reflected in its third-quarter results.
At the company’s financial results conference, Samsung executives outlined the demand environment as follows. “As the race to secure AI infrastructure continues, we expect data center companies to continue to expand their hardware investments. Therefore, demand for our AI-related servers continues to grow, and this demand significantly exceeds industry supply.”
This imbalance in supply and demand has created pricing power that Samsung lacked in its weaker quarters. The company specifically cited a “favorable pricing environment” and “significant reductions in one-time costs such as inventory price adjustments” as factors for the increase in profits.
Beyond Memories: Foundry Progress and Challenges
Samsung’s semiconductor recovery extended beyond memory chips. The foundry business, which manufactures chips designed by other companies, “recorded significant revenue improvement in the third quarter of 2025 due to one-time cost reductions and improved fab utilization.” The division also achieved “record customer orders, primarily at advanced nodes.”
The foundry business is ramping up volume production of 2-nanometer gate-all-around (GAA) products, a key technology that helps maintain a competitive edge against TSMC, the company that dominates the foundry market. Samsung has indicated that it plans to begin operations at its Taylor, Texas, factory in “timely manner” in 2026.
However, profits from Samsung’s system LSI business, which designs Exynos processors and image sensors, have stagnated “due to seasonality and customer inventory adjustments.”
What this means for 2026
Samsung’s outlook for next year reflects confidence that the semiconductor recovery has staying power. The memory business will “focus on mass production of HBM4 products with differentiated performance” and aim to “scale up HBM’s sales base.”
The company plans to expand its 1c manufacturing process capacity to meet the expected increase in HBM4 demand. Consolidated sales for the quarter reached 86.1 trillion won, an increase of 15.4% from the previous quarter and 8.85% from the same period last year. The Device Experience segment, which includes smartphones, contributed to revenue of 34.1 trillion won, supported by the launch of Galaxy Z Fold7 and strong sales of core products.
However, challenges still exist. Samsung Display reported strong performance with sales of 8.1 trillion won and operating profit of 1.2 trillion won, but its visual display business recorded an operating loss of 0.1 trillion won due to “intensified competition” despite “solid sales growth of premium products.”
The semiconductor recovery achieved by Samsung in the third quarter of 2025 has resolved the immediate crisis that threatened its market position. Whether the company can maintain its momentum while navigating fierce competition from HBM’s SK Hynix, foundry company TSMC, and new geopolitical pressures on the chip industry will determine whether this quarter marks a true turning point or just a grace period.
So far, Samsung has proven that even after four quarters of stagnation, it can still bounce back with strategic execution and market timing.
(Photo provided by Babak Habibi)
SEE ALSO: Samsung’s AI strategy delivers record profits despite semiconductor headwinds
Want to learn more about AI and big data from industry leaders? Check out the AI & Big Data Expo in Amsterdam, California, and London. This comprehensive event is part of TechEx and co-located with other major technology events. Click here for more information.
AI News is brought to you by TechForge Media. Learn about other upcoming enterprise technology events and webinars.
