Samsung flags jump in quarterly profit as AI chip demand drives up prices

SEOUL - Samsung Electronics on April 7 forecast its first-quarter earnings would exceed its entire profit for 2025, beating expectations as booming demand for artificial intelligence infrastructure stretched supply and drove chip prices higher.

Samsung has emerged as one of the major beneficiaries of the AI data centre boom that has constrained supply for traditional chips used in smartphones, PCs and game consoles and led to a near-doubling in chip prices in the first quarter alone.

The world’s largest memory chipmaker estimated an operating profit of 57.2 trillion won (S$49 billion) for the January to March period, compared with an LSEG SmartEstimate of 40.6 trillion won and a huge jump from 6.69 trillion won a year earlier.

The record-high results nearly triple Samsung’s previous record quarterly operating profit of 20 trillion won, reached in the fourth quarter of 2025.

Research TrendForce expects contract DRAM memory chip prices to increase more than 50 per cent in the current quarter as the shortage persists.

The company is also gaining from a slump in the South Korean currency to a near 17-year low against the US dollar, which has boosted repatriated earnings.

Meritz Securities senior analyst Kim Sunwoo estimated Samsung’s chip division generated 54 trillion won in operating profit, accounting for 95 per cent of its total profit, while the world’s No. 2 maker of smartphones after Apple fared better than feared, posting a 4 trillion won profit in its mobile division, a slight decline from a year earlier.

The mobile business was supported by the use of low-cost component inventories, he said, but its margins will likely come under increasing pressure in the second quarter due to rising costs of memory chips and other components and materials amid the war in the Middle East.

Samsung said its revenue was expected to grow 68 per cent to 133 trillion won in the January to March period.

The company will release details of its first-quarter earnings on April 30.

Headwinds

The rise in energy costs since the start of the Iran war has sparked worries that cooling demand from AI data centres and other customers as well as disruptions to the supply of key chipmaking materials could slow the growth momentum for chipmakers.

“There are growing concerns about a peak-out in memory price increases. It does appear that we are now past the initial upcycle phase and into a later stage,” said NH Investment & Securities senior analyst Ryu Young-ho.

He said the key issue would be how Samsung structures long-term contracts with customers to sustain its semiconductor earnings.

TrendForce senior vice-president Avril Wu said that in a sign of cooling growth, spot prices for DRAM chips eased last week, as “end-user demand struggled to absorb elevated prices”.

These concerns, as well as the unveiling of memory-saving technology from Google called TurboQuant in March, have contributed to a sell-off in memory chip stocks, with Samsung’s shares losing 11 per cent since the war began on Feb 28.

That said, its shares are still up 61 per cent in 2026, following a 125 per cent rise in 2025. REUTERS