In a significant market shift, the gross profit margins of leading memory chipmakers are projected to surpass those of foundry leader TSMC for the first time in seven years. According to industry reports, Samsung Electronics and SK Hynix are expected to achieve Q4 2025 memory business gross margins between 63% and 67%, exceeding TSMC's stable margin of around 60%. This marks a dramatic elevation in the profitability status of the memory sector, largely driven by soaring AI demand.
The reversal is powered by a structural change: the AI industry's pivot from training to inference, which has ignited explosive demand for DRAM and high-performance SSDs. This has created a severe supply shortage, leading to a powerful pricing cycle. Micron's recent earnings serve as early confirmation, with its gross margin jumping to 56.8% in fiscal Q1 2026 and guiding to 66%-68% for Q2.
Both Korean memory leaders are posting record results. SK Hynix reported a 39% year-over-year revenue increase in Q3 with operating profit surging 62% to a 47% margin. Samsung's semiconductor business contributed about 70% of its total profit, fueled by HBM3E demand. Analysts, including Morgan Stanley, believe this marks the start of a multi-year "super cycle," with the global memory market potentially reaching $300 billion by 2027.
For context, TSMC maintains a remarkably steady gross margin, which reached 59.5% in Q3 2025, an 11-quarter high, supported by strong demand for its advanced nodes (74% of revenue). While its model is different, the memory sector's margin surge highlights how AI-driven demand is disproportionately benefiting memory suppliers in the current phase, reshaping the semiconductor industry's profit map.
ICgoodFind's Insight
The crossover in gross margins is a landmark event signaling the intense, AI-fueled demand for memory. It underscores a period where memory chips are not just commodities but strategic, high-value components, attracting capital and reshaping competitive dynamics within the broader semiconductor landscape.
