Samsung Profit Surges: AI & Chip Shortage Drive Record Gains

Samsung Electronics is projecting a record first-quarter operating profit of 57.2 trillion won (approximately $37.8 billion), a more than eightfold increase from the 6.69 trillion won reported in the same period last year. The surge is driven by robust demand for AI memory chips, particularly high-bandwidth memory (HBM), and has already boosted the company’s share price.

The preliminary earnings guidance, released Tuesday, significantly exceeded analyst expectations of 42.3 trillion won, as calculated by LSEG SmartEstimate. Samsung’s revenue is also estimated to have increased nearly 70% year-over-year to 133 trillion Korean won.

AI Chip Demand Fuels Profit Surge

The dramatic increase in profitability underscores Samsung’s strengthening position in the rapidly expanding market for AI semiconductors. Demand for high-bandwidth memory chips, crucial for AI computing, has triggered shortages and driven up prices and volumes for memory manufacturers. According to Counterpoint Research analyst MS Hwang, commodity memory prices are projected to continue surging by more than 50% in the second quarter, with supply tightness expected to persist.

“Samsung Electronics’ first-quarter revenue and operating profit have reached a scale that rivals global Big Tech peers,”

MS Hwang, Research Analyst at Counterpoint Research

The company’s success in the HBM market is particularly noteworthy, as it has regained ground after initially falling behind its South Korean rival, SK Hynix. The preliminary guidance suggests Samsung is effectively competing in the high-bandwidth memory race.

Stock Market Reaction

Investors reacted positively to the news, sending Samsung Electronics shares up as much as 4.8% on Tuesday before settling with a 1.76% increase. The strong earnings forecast signals confidence in the company’s ability to capitalize on the growing demand for AI-related technologies.

Investment in Chip Capacity

Samsung is demonstrating its commitment to the semiconductor industry through substantial investment in chip capacity expansion and research. The company plans to spend more than ₩110tn (US$73bn) this year, a 22% increase from its 2025 capital expenditure. This investment surpasses the approximately US$50 billion allocated by its competitor, TSMC, highlighting Samsung’s ambition to lead in AI semiconductors.

The record-high results nearly triple Samsung’s previous record quarterly operating profit of 20 trillion won, reached in the fourth quarter of last year.