Samsung Electronics reckons its first-quarter operating profit will jump more than eightfold to a record, pinning it on an “unprecedented supercycle” for memory chips driven by the AI boom.
The number lands while the Middle East conflict deepens and energy costs spike for the data centres that keep AI tools chugging away.
Samsung forecast operating profit of Won57.2tn (about €35bn) in the first three months of the year, more than its entire 2025 operating profit of Won43.6tn (about €26.6bn). A year ago, it posted Won6.7tn (about €4.1bn) for the quarter.
The guidance left LSEG SmartEstimates’ Won40.5tn (about €24.8bn) looking timid, while sales are tipped to rise 68 per cent to Won133tn (about €81.3bn).
Macquarie analyst Daniel Kim said: “It couldn’t be better. It is historically the best single print ever for Korean [chipmaking] corporations. The industry supercycle is expected to outlast the Iran war.”
Samsung shares jumped as much as five per cent to Won203,000 (about €124) on Tuesday morning, though the stock is down about six per cent since the war began in late February. It is still up by more than 60 per cent this year, driven by chunky AI spend from big tech groups.
Analysts reckon the war has not dented chip output or pricing much, because a severe semiconductor shortage has swamped the hit from higher energy bills. There is chatter about raw materials such as helium, but Kim said Korean chipmakers have more than six months’ worth of the gas in inventory.
Expectations are building for even bigger numbers in the next few quarters as customers scramble for longer contracts while prices rip higher.
Samsung co-chief executive Young Hyun Jun told shareholders in March that the company is talking to major customers about three- to five-year deals, rather than the usual quarterly churn. The pitch is that longer contracts could blunt the industry’s notorious price swings.
Spot prices for dynamic random-access memory chips have dipped in recent weeks as higher consumer electronics prices squeeze demand for smartphones and PCs. Analysts think that softness is likely temporary if long-term contract prices keep climbing.
Chip stocks took a knock last week after Google rolled out TurboQuant, an algorithm promising to compress AI models without losing accuracy, meaning they can run with much less memory. Analysts say wider use of AI agents could still push up memory demand, including for the high-bandwidth parts Samsung sells.
TrendForce expects contract prices for conventional DRAM used in consumer electronics to continue surging after they doubled in the first quarter compared with the previous quarter. It thinks they will jump 58-63 per cent in the second quarter.
Samsung’s contract chipmaking business remains loss-making, separate from its memory cash machine, but the numbers are improving after recent deals. Those include a $16.5bn contract with Tesla and a partnership with Nvidia, which plans to build new AI inference processors at Samsung plants.
