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.
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