Samsung Forecasts Record ₩57.2 Trillion Q1 Profit on AI Chip Boom

Introduction: A Record-Breaking Forecast

Samsung Electronics has projected a record-breaking first-quarter operating profit, signaling a powerful recovery driven by the global boom in artificial intelligence. The world's largest memory chipmaker estimated its operating profit for the January-March period at ₩57.2 trillion. This figure dramatically surpasses analyst expectations, which averaged around ₩40.6 trillion, and represents a more than eight-fold increase from the ₩6.69 trillion reported in the same quarter a year earlier. The forecast suggests that the company's Q1 earnings could exceed its entire profit for the previous year, highlighting a significant turnaround in its financial performance.

The AI-Driven Supercycle

The primary catalyst for this unprecedented growth is the surging demand for infrastructure to support artificial intelligence. The global race to build AI data centers has created a massive appetite for high-performance memory chips, leading to supply constraints and a sharp increase in prices. This has particularly benefited Samsung's core semiconductor business. The market has seen chip prices nearly double in the first quarter alone. Industry analysts expect this trend to continue, with research firm TrendForce forecasting that contract prices for DRAM memory chips could rise by more than 50% in the current quarter as shortages persist.

Financials at a Glance

Samsung's preliminary earnings guidance paints a picture of robust growth across the board. The company anticipates a 68% year-over-year increase in revenue, reaching ₩133 trillion for the first quarter. The projected operating profit of ₩57.2 trillion not only dwarfs the previous year's figure but also nearly triples Samsung's previous all-time quarterly record of ₩20 trillion, which was set in the fourth quarter of 2025. This performance is a clear indicator of the so-called "unprecedented supercycle" in memory chips that the company has pointed to.

Dominance of the Chip Division

The semiconductor division is the clear engine of Samsung's profitability. According to analyst estimates from Meritz Securities, the chip division is expected to have generated approximately ₩54 trillion in operating profit, accounting for a staggering 95% of the company's total profit. This highlights the division's critical role in Samsung's financial health. In contrast, the mobile division, which competes with Apple as the world's second-largest smartphone maker, is projected to post a profit of around ₩4 trillion. While still a substantial figure, it represents a slight decline from the previous year, partly due to higher memory costs impacting production.

Competitive Landscape and HBM Chips

While Samsung benefits from the rebound in traditional DRAM and NAND chip demand, its progress in the high-bandwidth memory (HBM) market is also a key factor. HBM chips are essential for powering AI accelerators used by companies like Nvidia. Although Samsung was previously perceived as lagging behind its South Korean rival SK Hynix in this segment, it has been actively closing the gap. The company is advancing with its latest HBM4 chips, positioning itself to capture a larger share of this high-margin market. The rebound in traditional chip demand, fueled by AI inference applications that allow models like ChatGPT to generate real-time responses, has further exacerbated the overall chip shortage, benefiting Samsung's broader portfolio.

Market Reaction and Stock Performance

Investors responded positively to the strong earnings guidance. Samsung's shares jumped by as much as 4.6% in early trading following the announcement, outperforming the wider market. This continues a strong run for the stock, which is up 61% so far in 2026 after a remarkable 125% gain in 2025. However, the path has not been without volatility. The stock recently experienced an 11% sell-off amid geopolitical concerns and the unveiling of new memory-saving technology from Google called TurboQuant, which raised some concerns among investors about future demand.

Broader Context and Outlook

Several external factors are also contributing to Samsung's strong performance. A slump in the South Korean won to a near 17-year low against the US dollar has provided a significant boost to the value of repatriated overseas earnings. Looking ahead, while the memory chip business is thriving, other divisions face challenges. The company's foundry, or contract chip manufacturing, business is expected to remain in the red despite a recent partnership with Nvidia. The smartphone and display divisions are also projected to see profits decline due to intense market competition and rising component costs. The company is scheduled to release its detailed first-quarter earnings on April 30, which will provide further clarity on the performance of each division and its outlook for the coming quarters.