Samsung posts record profit on AI memory as its phones lose money

Samsung has closed the most profitable quarter ever recorded by a tech company: 107.4 trillion won in operating profit, roughly $80 billion. Nearly all of it comes from selling memory for AI, and nearly all of the pain comes from the same source.

Chips generated about $79.4 billion in operating profit, or 99% of the total. Memory sales reached around $104.9 billion, five times the level of a year earlier. Everything else is in the red: mobile and networks lost about $450 million, while TVs and home appliances lost roughly $150 million.

The same company on both sides of the counter

In total, the Device eXperience (DX) division lost around $600 million this quarter. A year ago it earned about $2.6 billion. According to Samsung's own results statement, server demand has pushed up memory prices across all kinds of products, smartphones included. The mobile unit sold more thanks to its new foldables, but earned less than a year ago because of higher costs.

The 2027 plan for Galaxy devices is telling: the stated goal is to minimize the decline in profit, with no mention of growth. The chip windfall more than offsets the losses, so this is not a case of AI giving with one hand and taking with the other, but Samsung is now effectively a memory maker with a comparatively small device business attached.

Why the shares fell

Shares dropped 4.13%, though not because of the phone losses. Investors expected share buybacks, which Samsung postponed to late January. They also hoped for an outlook like SK Hynix's, which sees shortages lasting until 2030, whereas Samsung speaks of 2028.

The tight supply looks set to last. Samsung estimates that in 2027 AI demand will outstrip supply even more than this year, and its HBM output for next year is already sold. As long as that holds, the chip division will keep charging high prices and the device division will keep paying them.