Samsung profit surges over eightfold to beat estimates as AI boom fuels memory chip crunch

Samsung Electronics reported an over eightfold increase in first-quarter operating profits on Thursday, hitting a new record and beating analysts’ estimates on the explosive growth of its chip business.

Here are Samsung’s first-quarter results compared with LSEG SmartEstimate, which is weighted toward forecasts from analysts who are more consistently accurate:

• Revenue: 133.9 trillion Korean won ($89.96 billion) vs. 132.69 trillion won expected

• Operating profit: 57.2 trillion won vs. 55.28 trillion won expected

The South Korean technology giant’s quarterly profit climbed more than 750% from a year earlier to a fresh record. The company also posted record revenue, up about 70% year over year. 

The profits came in line with Samsung’s own estimates of 57.2 trillion won and exceeded its full-year 2025 profits of 43.6 trillion won.

The earnings extend momentum from the final quarter of last year, when Samsung surpassed its prior record of 17.6 trillion won set in the third quarter of 2018.

Samsung’s record earnings came on the strength of its chip business. Besides its smartphone business and semiconductor foundry services, the firm is a major producer of memory chips.

The company’s chip division has emerged as a major beneficiary of the global AI data center boom, which has constrained supply and driven up prices of memory chips used in data centers and electronics such as smartphones, PCs and game consoles. 

The strong quarter also comes as Samsung continues to expand its high-bandwidth memory, or HBM, business, a key component in AI data center chips.

Samsung said in an earnings report that it expects server memory demand to remain strong into the second half of the year as hyperscalers continue to accommodate AI adoption and demand for agentic AI accelerates.

“Due to the boom driven by rising memory prices, we expect the next quarter to be better than the first, and we anticipate 2026 to be the best year for Samsung yet,” said Jeongku Choi, a research analyst at Counterpoint Research.

“Memory is firmly establishing its independent position as the deciding factor in the success or failure of AI infrastructure,” Choi added.

Samsung’s shares jumped about 1% in South Korea after the earnings release, but pared those gains in afternoon trade, ending the session 2.43% lower. Its shares are up around 90% so far this year.

Samsung’s chip business, also known as its DS (Device Solutions) division, encompasses its memory chip, semiconductor design and foundry business units. 

The division posted an operating profit of 53.7 trillion Korean won in the first quarter, compared with just about 1 trillion Korean won in the same period last year. Those profits accounted for more than 90% of the company’s total earnings for the quarter.

Counterpoint Research’s Choi noted that Samsung’s first-quarter operating profit margin exceeded 70%, surpassing those of chip giants Nvidia and TSMC in the latest quarter, as a memory shortage continues to push prices higher.

A Samsung executive said during a Thursday earnings call that the company’s available memory supply is expected to remain far behind customer demand.

“Our demand fulfillment rate is now at a record low, and unlike previous years, customers who are concerned about supply shortages are actually bringing forward their demand for 2027,” they said, adding that the supply and demand gap is expected to widen further in 2027.

While Samsung’s sales of high-bandwidth memory have helped push up profit margins, it is also facing strong competition in the HBM segment after giving up an early lead to rival SK Hynix.

Samsung has been racing to catch up to SK Hynix in the lucrative technology, announcing in February that it became the first in the world to mass-produce HBM4 memory chips and ship them to unnamed customers.

HBM4 is the sixth generation of HBM technology and the most advanced version to date. It is expected to be the main AI memory chip used in Nvidia’s next-generation Vera Rubin architecture, designed for powerful AI workloads in data centers. 

SK Hynix first announced that it was sending samples of its HBM4 to customers in March of last year and said it had prepared HBM4 for mass production in September. However, the company is yet to announce commercial shipments of HBM4.

“Samsung has made improvements in HBM4 and the gap against SK Hynix is narrower versus previous generations of HBM,” said Ray Wang, analyst at SemiAnalysis, where he leads the company’s memory coverage from Seoul.

“Yet we continue to see SK Hynix leading the HBM race versus its peers,” he added. 

According to data from Counterpoint Research, SK Hynix continued to lead HBM with a 57% revenue market share in the final quarter of last year. 

While Samsung’s chip business is expected to continue benefiting from rising memory prices, the trend might negatively affect its other business segments.

Higher prices of memory chips widely used in consumer electronics goods are expected to pressure Samsung’s smartphone and home-appliance businesses.

Meanwhile, the company said in its earnings call on Thursday that it will continue to monitor the conflict in the Middle East, which poses a risk to Samsung’s raw material and energy supply chains.