Samsung Electronics Expects Q1 Operating Profit to Surge 755%, Surpassing Last Year's Total Annual Profit!

Samsung Electronics announced its preliminary first-quarter results on Monday. The company expects first-quarter operating profit to reach 57.20 trillion South Korean won, significantly beating analysts' expectations of 39.28 trillion South Korean won, and far surpassing the same period last year to set a new historical record. This indicates that even amidst uncertainties caused by the conflict in the Middle East, demand for memory chips used in artificial intelligence (AI) and data centers remains robust.

Key highlights of Samsung's preliminary first-quarter results:

Revenue: Samsung expects first-quarter revenue to rise to 133 trillion South Korean won, a 68% year-on-year increase, higher than the market expectation of 116.8 trillion South Korean won.

Preliminary Operating Profit: Samsung expects preliminary operating profit for the first quarter to be 57.2 trillion South Korean won (approximately $37.9 billion), a significant year-on-year increase of 755%, setting a new historical record and far exceeding the average analyst expectation of 39.3 trillion South Korean won.

The news spurred a 5% rise in Samsung Electronics' pre-market trading. Samsung will release its full financial report later this month, including net profit and detailed data for each business division.

According to the report, the company's operating profit in the first quarter significantly surpassed previous quarterly performances, nearly tripling its previous record level of 20 trillion South Korean won set in the October-December quarter of last year, and also exceeding the 43.6 trillion South Korean won achieved in the full year of 2025. South Korean government data shows that South Korea's semiconductor exports, a barometer of global tech demand, surged by 151.4% year-on-year in March, reaching a record $32.8 billion.

Media reports indicate that customers, particularly cloud service providers, are increasing their orders, leading to improvements in both shipment volumes and profit margins. As demand for AI data centers surges, Samsung Electronics has become one of the main beneficiaries.

This trend has compressed the supply of traditional chips used in smartphones, personal computers, and gaming consoles, and has driven chip prices to nearly double in the first quarter. Research firm TrendForce expects contract prices for DRAM to rise by over 50% this quarter amid ongoing supply shortages.

Mirae Asset Securities stated that the Device Solutions (DS) division of Samsung Electronics alone is expected to achieve an operating profit of over 42 trillion South Korean won in the first quarter.

HBM Breakthrough Coupled with AI Demand Recovery

Samsung's stock price rose more than 120% last year, but has since fallen about 12% from its February high. Concerns about the conflict in Iran potentially driving up prices and interest rates have raised questions about the sustainability of AI hardware spending. About a year ago, the CEO of Samsung Electronics publicly apologized for the company's poor performance and stock price, as the company had lagged behind competitors in providing critical High Bandwidth Memory (HBM) for Nvidia's AI chips.

However, with the launch of the latest HBM4 chip, Samsung Electronics is gradually closing the gap with its South Korean competitor SK Hynix, while also benefiting from the recovery in demand for traditional chips driven by AI inference.

Samsung Electronics, along with SK Hynix and Micron Technology, dominates the global memory chip supply. In recent years, these three companies have increasingly shifted their production capacity to HBM for Nvidia's AI accelerators, thereby tightening the supply of traditional memory chips.

Concurrently, prices for traditional DRAM used in servers, personal computers, and mobile devices have also risen sharply, further boosting performance. Citi analysts Peter Lee and Jayden Oh noted in a report on April 2 that the average selling price of global DRAM increased by 64% quarter-on-quarter in the first quarter.

Analysts remain optimistic about Samsung Electronics, largely disregarding the potential impact of AI optimization technologies from Google TurboQuant or Anthropic Claude Mythos. Citi expects prices to be supported by continued strong demand for AI inference, with Samsung Electronics' full-year operating profit projected to reach 310 trillion South Korean won (approximately $206 billion) in 2026.

Last month, US memory chip manufacturer Micron Technology reported record-breaking results for its second quarter and forecast third-quarter revenue above Wall Street expectations, reflecting strong AI demand and a tight supply market.

Additionally, the company's Mobile eXperience (MX) division is expected to benefit from new products launched earlier this year, including the Galaxy S26 series.