Samsung Reports Eightfold Increase in Q1 Profit, Driven by Strong Demand for AI Chips

Samsung Electronics Projects Record-High First-Quarter Profit

Samsung Electronics has projected a record-high first-quarter profit, exceeding expectations as booming demand for artificial intelligence infrastructure caused supply bottlenecks and drove chip prices higher. The world's largest memory chipmaker estimated an operating profit of 57.2 trillion won ($37.92 billion) for the January to March period, compared with an LSEG SmartEstimate of 40.6 trillion won.

This represents a more than eight-fold jump from 6.69 trillion won a year earlier, and nearly triples Samsung's previous record quarterly operating profit of 20 trillion won, reached in the fourth quarter last year. The preliminary results are a significant turnaround for the company, which about a year ago apologized for its disappointing earnings and share price performance.

The AI data centre boom has constrained supply for traditional chips used in smartphones, PCs, and game consoles, leading to a near-doubling in chip prices in the first quarter alone. Research TrendForce expects contract DRAM memory chip prices to increase more than 50% in the current quarter as the shortage persists.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Samsung has emerged as one of the major beneficiaries of the AI data centre boom, benefiting from the rebound in traditional chip demand fueled by AI inference, which allows AI models like ChatGPT to generate responses in real time. The company has been narrowing the gap with South Korean rival SK Hynix with its latest HBM4 chips, while its revenue is expected to grow 68% to 133 trillion won in the January to March period.

Key Statistics: