Samsung Electronics is on track to report a dramatic surge in first-quarter earnings, powered by soaring memory chip prices fueled by the global artificial intelligence (AI) investment boom, according to analysts.
The South Korean tech giant Samsung Electronics is projected to post a six-fold jump in operating profit for January–March, marking a quarterly record and coming close to its full-year earnings from the previous business year. The company is expected to report operating profit of 40.5 trillion won ($26.9 billion), alongside a 50% rise in revenue, based on an LSEG SmartEstimate drawn from 29 analysts.
Samsung attributed the momentum to what it has described as an “unprecedented supercycle” in memory chips. For comparison, the company recorded 43.6 trillion won in operating income for all of last year. Some analysts are even more optimistic, with Citigroup forecasting operating profit could reach as high as 51 trillion won.
“You couldn’t ask for things to be better,” said Ko Yeongmin, analyst at Daol Investment & Securities, pointing to the strength in the memory chip market.
However, Samsung typically withholds detailed forward guidance until its full earnings breakdown later in the month.
The broader semiconductor rally has been driven by intense demand for high-performance chips used in AI data centres. But analysts warn the outlook is becoming more complex.
Rising geopolitical tensions and conflict-related disruptions have pushed up energy costs and raised concerns about potential supply chain bottlenecks for key production materials. Some analysts say this could eventually force major technology firms to scale back investments in AI infrastructure.
There are also early signs of cooling in spot prices for DRAM (dynamic random access memory) chips, as higher prices for smartphones and computers begin to weigh on consumer demand.
These concerns, combined with the introduction of memory-optimizing technology from Google called TurboQuant, have contributed to a recent selloff in semiconductor stocks. Samsung shares have fallen 14% since the latest round of conflict began on February 28, although they remain up about 50% year-to-date, supported by massive AI-related capital expenditure plans from Big Tech.
“We have seen a cooling (in memory chip spot prices) over the last 3-4 weeks yes. We do believe it’s temporary,” said Tobey Gonnerman, president of semiconductor distributor Fusion Worldwide.
“The demand and backlog remains strong,” he added, noting that it could take a long time for supply to catch up with global demand.
Market research firm TrendForce also expects DRAM contract prices to continue rising, projecting a 58–63% increase in the April–June quarter after doubling in the first quarter.
Samsung co-CEO Jun Young-hyun said last month that the company is working with major clients to shift toward three-to-five-year contracts in order to reduce exposure to demand volatility.
While Samsung’s memory chip business is expected to dominate profits, other segments are likely to struggle.
Analysts say Samsung’s foundry (contract chip manufacturing) division, which competes with TSMC, is expected to remain in the red. However, the unit recently received a boost through a partnership with Nvidia to produce AI inference processors.
Meanwhile, Samsung’s smartphone and display divisions are projected to see profits drop by around 50% in the first quarter due to higher memory costs and intense market competition, according to Kiwoom Securities.
Samsung may also face internal pressure, as labour unions in South Korea push for changes to the company’s bonus structure and have threatened strike action in May, adding another layer of uncertainty to its outlook.
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