Samsung Electronics has become the first South Korean company to achieve quarterly revenue exceeding 100 trillion won and operating profit surpassing 50 trillion won. Its first-quarter operating profit reached 57.2 trillion won, equating to earnings of 440 million won per minute, or 6.356 trillion won per day over the three-month period. If distributed equally among South Korea's 51.11 million citizens, each person would receive 1.12 million won. This remarkable performance was driven by a dual boost from surging prices and sales volumes of DRAM, NAND, and HBM chips. It highlights how Korean semiconductor firms are achieving global expansion fueled by artificial intelligence-driven demand. Samsung's profit in the first quarter alone exceeded its total profit for the entire previous year—a record matched by only a few companies such as NVIDIA, Amazon, Tesla, and SK Hynix. Industry experts anticipate that Samsung will continue to generate substantial profits in the second quarter and the latter half of the year, supported by robust demand for memory semiconductors.
The dramatic increase in Samsung's first-quarter profit is largely attributable to the sharp rise in DRAM prices. Rapid advancements in artificial intelligence have led to explosive demand for HBM, the memory chips used in NVIDIA GPUs and AI data centers. HBM utilizes a stacked DRAM structure similar to apartment buildings, forcing manufacturers to reconfigure production lines and resulting in a DRAM shortage. Server DRAM, another critical component of AI infrastructure, is also facing shortages, further driving up prices. According to DRAMeXchange data, DRAM contract prices have risen for 11 consecutive months, increasing from $1.35 in January of last year to $13 by the end of March. As of the 7th, the price of the latest server DRAM chip, "DDR5 16Gb 4800/5600," surged to $37 per unit, making its price per gram (327,749 won) higher than that of gold (224,630 won). In contrast, the same chip was priced at just $6.01 in June of last year.
The soaring DRAM prices have significantly benefited Samsung, which is one of the largest DRAM producers alongside SK Hynix and Micron. Kim Sun-woo, an analyst at Meritz Securities, estimated that DRAM and NAND flash prices increased by more than 90% quarter-over-quarter. He attributed Samsung's success to its aggressive pricing strategy and advantageous cost structure as a leader in the memory industry. Although Samsung does not disclose segment-specific profits, analysts estimate that the memory business contributed 54 trillion won to the total operating profit of 57.2 trillion won. It was reported that the system-on-chip (semiconductor design) and foundry (contract manufacturing) businesses incurred a loss of 1.6 trillion won, while the smartphone and network division generated a profit of 4 trillion won. The home appliance and television business reported a profit of 100 billion won.
Despite ongoing conflicts in the Middle East, the semiconductor industry expects memory demand to remain strong in the second quarter and the second half of the year, supported by continued AI investment. Citigroup predicts that the five largest U.S. tech companies—Alphabet, Amazon, Meta, Microsoft, and NVIDIA—will increase their spending on AI infrastructure by 69% this year, reaching $700 billion. TrendForce forecasts that DRAM prices will rise by 58% to 63% in the second quarter. Even though companies plan to expand production capacity, supply shortages are anticipated to persist until 2027. Analysts project that Samsung's operating profit could exceed 300 trillion won this year and surpass 400 trillion won next year.
Kim Dong-won, head of research at KB Securities, stated, "The trend of increasing memory usage in AI inference will continue for several years." He predicts that Samsung's operating profit will reach 327 trillion won by 2026 and 488 trillion won by 2027, surpassing NVIDIA. The gap between Samsung and the global leader, NVIDIA, is expected to narrow to 30 trillion won this year, with Samsung potentially overtaking NVIDIA next year. Risks remain: prolonged conflict in the Middle East could slow AI investment, dampening the semiconductor boom. Rising memory prices may also lead to higher smartphone costs, with global smartphone sales projected to decline by 17% year-over-year.
Samsung's stock rose as much as 5% during today's trading session before settling with a 2% gain, boosted by the company's forecast of record quarterly profit driven by growing AI-related demand for its memory chips. The world's largest memory chip supplier projected first-quarter operating profit of 57.2 trillion won (approximately $379 billion), far exceeding analysts' previous estimate of 40.6 trillion won. This figure is more than eight times higher than the 6.69 trillion won profit recorded in the same period last year and triple the previous record high of 20 trillion won set three months ago.
As demand for its memory chips continues to outstrip supply, Samsung has emerged as one of the biggest beneficiaries of the AI boom. Its memory chips are used not only in AI servers within data centers but also in PCs, smartphones, and various other computing devices. TrendForce expects prices for dynamic random-access memory (DRAM) chips to increase by more than 50% this quarter due to persistent supply shortages. Meanwhile, Kim Sun-woo, an analyst at Meritz Securities, told Reuters that actual contract prices are sometimes even higher than market expectations. Additionally, the depreciation of the South Korean won has boosted Samsung's overseas earnings. The won recently fell to its lowest level against the U.S. dollar in 17 years.
Although Samsung did not provide detailed segment profit figures in its earnings forecast, Kim indicated that the company's chip division likely contributed approximately 54 trillion won in profit, accounting for 95% of the total. In contrast, its smartphone business is expected to generate only 4 trillion won in profit, slightly lower than the same period last year but above analysts' expectations. The company has made significant progress in the high-bandwidth memory (HBM) chip sector, having previously struggled to bring its most advanced chips to market. While the HBM market was dominated by its competitor SK Hynix last year, Samsung has since delivered its latest HBM4 chips to customers, helping it regain market share.
However, the majority of Samsung's profit surge stems from soaring prices of conventional memory chips, which are essential for AI inference. HBM chips are primarily used for AI training workloads. Analysts note that HBM chip revenue accounts for about 5% of the company's total chip revenue. Kim suggested that growth in Samsung's smartphone business was supported by its inventory of low-cost components. However, as this inventory is gradually depleted, the company's profit margins may decline in the second quarter when it must procure new components at higher prices.
Samsung also provided a revenue forecast, projecting sales to increase to 133 trillion won, a 68% rise compared to the same period last year. The company will release its full earnings report on April 30. Nevertheless, Samsung faces several headwinds in the coming quarters. The conflict in the Middle East, which has driven up energy costs, raises concerns that demand for memory chips from AI data centers could weaken. Additionally, ongoing tensions in the region may cause disruptions in the chip manufacturing supply chain, potentially slowing growth.
Yoo Young-ho at NH Investment & Securities told Reuters that Samsung will attempt to restructure long-term contracts to sustain growth in its semiconductor business. However, even so, "concerns remain that memory price increases may peak." Analysts indicate that signs of such concerns are already emerging, as DRAM spot prices declined last week due to end-users struggling with high costs. Last month, Samsung's stock was briefly impacted when Google introduced a new technology called TurboQuant, which enables AI workloads to run on chips with less memory. Despite this, Samsung's shares quickly recovered and have risen 61% year-to-date.
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