Samsung’s challenge: higher revenue and production in the memory chip sector

Artificial intelligence. It’s always the same old story. In the specific case of Samsung Electronics, this takes the form, above all, of new high-performance computer memory chips. It is one of the key elements of the development strategy on which the South Korean conglomerate is focusing.

A giant which, it is worth noting, divides its business essentially into four major areas: Device eXperience (Dx), Device Solutions (Ds), Samsung Display Corporation (SDC) and Harman. The first segment (48,400 billion won in revenue in the third quarter of 2025, equivalent to approximately 28 billion euros) represents the consumer division. This includes smartphones, tablets, wearables, TVs, household appliances and 5G and 6G network solutions. Device Solutions (33,100 billion won), on the other hand, is the company’s technological driving force. This segment encompasses memory chips for AI, such as DRAM and HBM, as well as in-house designed processors and chips manufactured in the company’s foundries (including for third parties). Then there is SDC (8,100 billion). In other words: the division which, on the one hand, supplies OLED screens for premium smartphones, laptops and monitors; and, on the other, manufactures QD-OLED panels for high-end televisions. Finally: Harman (4,000 billion in turnover). This division specialises in audio systems and technologies for connected cars.

Well then: highlighting the diversification of the business – which is one of Samsung’s strengths – the DS division recorded the largest increase in revenue in the third quarter (+13 per cent year-on-year). In particular, the memory sector took the lion’s share – driven mainly by demand linked to artificial intelligence (AI) – with a 20 per cent increase. But that’s not all. In terms of operating profit too, the Device Solutions division recorded the largest increase in profitability (a rise of 3,100 billion won). In short: the main driver of turnover and profitability for the South Korean giant was, precisely, the business of memory and advanced components required for AI. Above all: the ultra-fast ‘stacked’ memory known as HBM (alongside DDR5) and the so-called eSSDs used in enterprise data centres.

So far, we have looked at some of the most recent trends in the profit and loss account. However – as is always the case – to gain a better understanding of the group’s performance, it is useful to extend the time frame of the analysis. In 2020, Samsung closed the financial year with revenue of approximately 236,800 billion won and an EBIT of 35,990 billion won. The operating margin, for its part, stood at 15.2 per cent. In 2021, at the height of the digital transformation, consolidated sales rose to around 279,600 billion, and operating profit stood at 51,600 billion, with a double-digit margin exceeding 18 per cent. In 2022, however, turnover reached 302,230 billion won: a record in terms of volume. Nevertheless, operating profit slipped to 43,380 billion (a margin of 14.4 per cent). This trend signalled that a simple increase in volumes was not enough to guarantee high profits. Then came 2023, the most critical point. In that financial year, demand for semiconductors fell and – compounded by an oversupply that drove prices down – the company ended the year with revenue of 258,940 billion won and a meagre EBIT of around 6,570 billion: meagre margins, a loss of competitiveness in the memory segment and serious doubts about the future. This situation cast several dark clouds over the Asian conglomerate’s future. In 2024, however, demand stabilised: there was a gradual recovery in the chip sector and a moderate upturn in the consumer sector. As a result, Samsung managed to climb back to a total turnover of 300,900 billion won, with an EBIT of 32,700 billion and an operating margin of 10.9 per cent, Finally, 2025 marked, precisely, a turnaround. In the third quarter – overall – the group generated sales of 86,100 billion won and an operating profit of 12,200 billion. Setting aside past trends, however, the DIY investor asks: what are the next moves? With regard to semiconductors, specifically the DS division, the company is focusing primarily on high-end memory in the current financial year: HBM3E, i.e. ultra-wideband ‘stacked’ memory for GPUs and AI, and 128GB DDR5, used in next-generation servers. More generally, the group plans to capitalise on all high-value-added memory products. As for next year, however, Samsung – amongst other things – has confirmed its aim to commence production at its new factory in Taylor (Texas) in the United States. From microchips to Device eXperience (DX), which encompasses all consumer products. Here, the company intends to focus on smartphone sales in the fourth quarter (also with a view to the Christmas season). In particular, the aim is to focus on the Galaxy S25 range and foldable phones, integrating them with artificial intelligence features to differentiate the products and promote the premium models.As for Sdc, the group expects a positive contribution in the fourth quarter, thanks to the launch of new premium models by key customers and increased demand for gaming monitors based on Qd-OLED technology. Finally, the Harman division. The subsidiary, which specialises in premium audio and automotive technologies, enters the fourth quarter with growth expected in both consumer solutions – thanks to seasonal factors – and automotive infotainment systems. And what about 2026? The plan is to expand its presence in the automotive sector through a more diversified portfolio of manufacturers and new audio brands.

So, is everything plain sailing? The reality is more complicated. Firstly, on the geopolitical front, we must bear in mind the trade tensions and US tariffs on imports from Vietnam. This is a significant issue, as Vietnam is a strategic hub for Samsung’s mobile phones. So much so that the company is reviewing its production chains and costs. But that’s not all. Another aspect highlighted by analysts concerns governance and internal structure. The company – it is pointed out – is ‘shaped’ (in part) by the complex ‘chaebol’ structure typical of South Korea: an organisational model that risks limiting efficiency and transparency in strategic decision-making.Another potential vulnerability is the heavy reliance on DRAM and NAND memory, sectors which have in the past experienced sharp fluctuations in price and demand due to global overcapacity. Furthermore, still on the semiconductor front, competition on various fronts – from Chinese rivals to other advanced chip manufacturers such as Qualcomm in the mobile sector and TSMC in foundry operations – represents a further challenge to growth and margins. Last but not least, there is fierce competition in the smartphone segment, particularly from brands such as Apple in the premium segment and from Chinese manufacturers in the budget segment. It is true that, according to IDC, at the end of the third quarter of 2025, Samsung held the top spot in terms of global market share (19 per cent) across the total number of mobile phones sold (Apple was in second place with 18.2 per cent). That said, however, the underlying assessment remains the same: competition in this device category is very fierce, and the company’s results may be affected (positively or negatively) by trends in revenue from smartphones and similar devices.