Samsung Electronics Co earned a far stronger-than-expected eightfold leap in quarterly profit, underscoring robust demand for artificial intelligence (AI) memory chips in the face of markets roiled by war in the Middle East.
Customers led by cloud service providers are ramping up orders for high-bandwidth memory (HBM) and other chips used in data centers to feed AI services, lifting volumes and margins at the chips-to-smartphones conglomerate.
Samsung reported preliminary operating profit of 57.2 trillion won (US$38.2 billion) in the first quarter — up 755 percent to hit a record — versus analysts’ average projection for 39.3 trillion won. Revenue climbed to 133 trillion won, against the average estimate of 116.8 trillion won. The company is to release a full financial statement including net income and divisional breakdowns on April 30.
Photo: AFP
Samsung dominates global memory supply along with SK Hynix Inc and Micron Technology Inc. The trio has increasingly shifted production in the past few years toward HBM used in Nvidia Corp’s AI accelerators, tightening supply of conventional memory.
The first-quarter operating profit dwarfs Samsung’s performance in other quarters and blew past the 43.6 trillion won the company generated in all of last year. South Korea’s semiconductor exports — a bellwether of global technology demand — soared 151.4 percent last month to a record US$32.8 billion, the South Korean Ministry of Trade, Industry and Resources reported last week.
Analysts remain upbeat on South Korea’s biggest company, largely dismissing concerns about AI optimization by offerings such as Google’s TurboQuant or Anthropic PBC’s Claude Mythos.
The average selling price of global DRAM surged 64 percent in the first quarter from the previous quarter, Citigroup Inc said in a report on Thursday last week.
For Samsung, Citigroup forecasts annual operating profit of 310 trillion won this year, saying it expects strong AI inference demand to sustain pricing.
Earlier this year, Samsung was first to commercially ship next-generation HBM4 to customers. The company showcased its cutting-edge HBM4E chip at Nvidia’s GTC event last month, where the US company’s chief executive officer Jensen Huang (黃仁勳) said the South Korean company’s advanced 4-nanometer technology would be used to manufacture Groq 3 processors. Samsung has also inked a deal to supply HBM4 chips to Advanced Micro Devices Inc.
The domestic unit of the Chinese-owned, Dutch-headquartered chipmaker Nexperia BV will soon be able to produce semiconductors locally within China, according to two company sources. Nexperia is at the center of a global tug-of-war over critical semiconductor technology, with a Dutch court in February ordering a probe into alleged mismanagement at the company. The geopolitical tussle has disrupted supply chains, with some carmakers reportedly forced to cut production due to chip shortages. Local production would allow Nexperia’s domestic arm, Nexperia Semiconductors (China) Ltd (安世半導體中國), to bypass restrictions in place since October on the supply of silicon wafers — etched with tiny components to
Taiwan is open to joining a global liquefied natural gas (LNG) program if one is created, but on the condition that countries provide delivery even in a scenario where there is a conflict with China, an energy department official said yesterday. While Taiwan’s priority is to have enough LNG at home, the nation is open to exploring potential strategic reserves in other countries such as Japan or South Korea, Energy Administration Deputy Director-General Chen Chung-hsien (陳崇憲) said. While the LNG market does not have a global reserve for emergencies like that of oil, the concept has been raised a few times —
AI-FUELED DEMAND: The company has been benefiting from the skyrocketing prices for DRAM chips amid the AI frenzy, especially its core product — DDR4 DRAM chips DRAM chipmaker Nanya Technology Corp (南亞科技) yesterday reported that its revenue for the first quarter surged 582.91 percent to NT$49.09 billion (US$1.54 billion) from NT$7.19 billion a year earlier, as the supply crunch caused chip price spikes. Last quarter’s figure is the highest on record. On a quarterly basis, revenue jumped 63.14 percent from NT$30.09 billion, the company said. In January, Nanya Technology expected global DRAM supply scarcity to continue through the first half of 2028, thanks to strong demand for artificial intelligence (AI) applications. Market researcher TrendForce Corp (集邦科技) forecast prices of standard DRAM chips would rise between 58 percent and 63
HIGHER PRICES: Given rising energy costs, CPC raised natural gas prices for generators by 41.58%, which Taipower said would raise its power generation costs by NT$10 billion State-run CPC Corp, Taiwan (CPC, 台灣中油) has activated its fourth naphtha cracker to boost ethylene supply, aiming to ease concerns over plastic material shortages amid tensions in the Middle East, the Ministry of Economic Affairs said yesterday. The move is expected to add 19,000 tonnes of supply this month and 30,000 tonnes next month, Deputy Minister of Economic Affairs Ho Chin-tsang (何晉滄) said at a meeting of the legislature’s Economics Committee in Taipei. CPC on Tuesday held talks with major polyethylene producers, including Formosa Plastics Corp (台塑), Asia Polymer Corp (亞聚) and USI Corp (台聚), and pledged to supply ethylene feedstock
RSS