(Bloomberg) -- Samsung Electronics Co.’s chip unit blew past expectations with a more than five-fold profit gain in the December quarter, boosted by an artificial intelligence boom, and announced a $2.5 billion buyback.

The company’s semiconductor arm reported a three-month operating profit of 16.4 trillion won ($11.4 billion), compared with analysts’ average projection of 10.85 trillion won. Its overall net income came to 19.29 trillion won, compared with estimates of 15.1 trillion won. Samsung said it would buy back 3.57 trillion won worth of its shares.

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Samsung’s shares more than doubled in value in 2025 and surged about 35% this month, reflecting hopes for a blowout year as prices of memory chips climbed faster than anticipated. The growth is a reflection of the speed in which the industry’s balance has shifted as hyperscalers pour hundreds of billions of dollars into AI infrastructure.

Voracious appetite for AI memory is outstripping global supply, creating a windfall for industry leaders like Samsung and SK Hynix Inc. But that demand has caused shortages of conventional DRAM and NAND used in personal computers and smartphones.

Memory manufacturers are reallocating production lines toward lucrative high-bandwidth memory to satisfy the needs of AI data centers. Because HBM requires about three times the wafer capacity of standard DRAM for the same amount of memory, this shift has reduced supply for the consumer electronics industry. That’s threatening double-digit price hikes for PC makers and smaller electronics companies.

Attention is on Samsung’s bid to narrow the gap with SK Hynix with next-generation HBM4, which is set to be integrated with Nvidia Corp.’s upcoming flagship Rubin processors. Samsung is close to obtaining certification from Nvidia for the latest version of its AI memory chip.

“SK Hynix currently leads in HBM technology, while Samsung is working hard to close the gap,” said Young Jae Lee, senior investment manager at Pictet Asset Management Ltd. “Investors will be closely watching both companies for their perspective on the memory market outlook.”

--With assistance from Sangmi Cha.

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