Samsung posts record quarterly profit as AI chip demand surges eightfold

Samsung Electronics on Wednesday reported first-quarter operating profit of 57.23 trillion Korean won (roughly $38 billion), an eight-fold increase from 6.68 trillion won a year earlier, setting an all-time quarterly record as insatiable demand for AI memory chips transformed the company's bottom line.

The results handily beat Wall Street expectations. Analysts had forecast operating profit of around 40.6 trillion won, according to Reuters, based on LSEG SmartEstimate. Net income for the quarter rose more than five-fold to 47.22 trillion won, while revenue climbed 69.2 percent to 133.87 trillion won.

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The Chip Division's Dominance

The semiconductor unit drove nearly all of the gains. Samsung's Device Solutions division posted operating profit of 53.7 trillion won — a 48-fold jump from roughly 1 trillion won a year earlier — accounting for about 94 percent of companywide profit. The explosive growth reflects surging prices for high-bandwidth memory, or HBM, the specialized chips stacked inside AI accelerators made by Nvidia and others.

Samsung said its memory segment "exceeded its quarterly sales record by meeting the high-value demands of AI, despite limited supply, with overall industry price increases for memory also playing a role". Market research firm TrendForce estimated that contract DRAM prices rose more than 50 percent during the quarter as manufacturers shifted wafer capacity toward HBM and away from conventional memory.

HBM4 and the Supply Crunch

Samsung began mass production of its next-generation HBM4 chips in February, claiming an industry first, and has shipped commercial products to customers including major hyperscale cloud operators. Each new AI accelerator rack requires vastly more HBM than its predecessor, and production consumes roughly three times the wafer capacity of standard DRAM, creating cascading shortages across the broader memory market.

The quarter's profit alone surpassed Samsung's full-year 2025 operating profit of 43.6 trillion won and nearly matched its previous all-time annual record of 58.89 trillion won set in 2018. A weaker Korean won against the dollar added an additional boost to repatriated earnings.

Broader Outlook

Not all of Samsung's businesses shared in the windfall. The mobile and network division saw profit decline 35 percent to 2.8 trillion won, squeezed in part by rising component costs. Still, Samsung said it expects server memory demand to remain strong through the rest of the year as hyperscalers continue scaling AI infrastructure. SK Hynix and Micron, the other two major memory makers, are navigating the same supply dynamics in a market that TrendForce projects will reach more than $840 billion in global revenue by 2027.

Samsung's own earnings, released on April 29, underscored the divergence between its semiconductor and mobile businesses. The company reported record quarterly revenue of 133.9 trillion Korean won and operating profit of 57.2 trillion won, driven overwhelmingly by AI-fueled demand for memory chips rather than handset sales.

The record earnings were powered almost entirely by Samsung's semiconductor division, which posted 81.7 trillion won in revenue and 53.7 trillion won in operating profit — a more than 48-fold surge from a year earlier. The company began mass-producing and shipping HBM4 memory chips, a key component for AI accelerators used by Nvidia and others.