Samsung Apologized Last Year For Lagging In AI Chips, Now The Company Eyes Record Profit Of Nearly $38 Billion Amid Booming Memory Prices

On Tuesday, Samsung Electronics (OTC:SSNLF) projected a first-quarter operating profit of about KRW 57.2 trillion ($37.92 billion).

AI Boom Fuels Samsung's Record Profit Surge

The projection blows past expectations and exceeds the company’s total profit for all of last year.

The world's largest memory chipmaker's first-quarter operating profit marks an increase of more than eight times from 6.69 trillion won a year earlier.

The figure also nearly triples Samsung's previous quarterly record of 20 trillion won, set in the fourth quarter of last year.

Chip Shortage Pushes Memory Prices Higher

The AI boom has strained global chip supply, particularly for memory, sending prices sharply higher.

Analysts say DRAM prices nearly doubled in the first quarter and could climb more than 50% again in the current quarter as shortages persist, Reuters reported.

Higher contract prices, driven by customer stockpiling ahead of further increases, helped Samsung deliver a significant earnings beat.

Chip Division Dominates Earnings

Kim Sunwoo, a senior analyst at Meritz Securities told the publication that Samsung's semiconductor business accounted for roughly 95% of total operating profit.

While the company remains the world's second-largest smartphone maker after Apple Inc. (NASDAQ:AAPL), its mobile division posted a modest profit decline.

The weaker South Korean won also boosted earnings by increasing the value of overseas revenue.

Catching Up In AI Memory Race

Last year in March, Samsung's CEO issued a rare apology following weak earnings and share price performance.

At the time, the company fell behind competitors in supplying high-bandwidth memory (HBM) chips essential for Nvidia Corp's (NASDAQ:NVDA) AI processors.

Since then, it has begun narrowing the gap with rival SK Hynix by shipping newer-generation HBM chips.

Still, most of Samsung's current gains come from traditional DRAM and NAND chips, as AI demand boosts the broader memory market.

Outlook Remains Strong Despite Risks

Samsung said it expects first-quarter revenue to rise about 68% year over year to 133 trillion won. The company is scheduled to release detailed earnings results on April 30.

Price Action: Shares of Samsung rose 0.73% to 194,500 won on Tuesday, outperforming the KOSPI, which gained 0.28%, according to Benzinga Pro.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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