Samsung Electronics posted a record quarterly profit on Thursday, driven by a 49-fold jump in its chip division's income. The company expects the strong momentum to persist as clients ramp up spending on AI infrastructure.
The world’s largest memory chipmaker reported a first-quarter operating profit of 57.2 trillion won ($38.5 billion), up from 6.69 trillion won a year earlier. The chip division alone contributed 53.7 trillion won, accounting for 94% of total profit.
Samsung said it has signed multi-year binding contracts with customers seeking to secure chip supplies, though it did not disclose specific clients or terms. The company also forecast strong server memory demand from hyperscalers supporting enterprise AI adoption, and sees agentic AI accelerating growth in the second half of the year.
Shares of Samsung slipped 0.2% after the announcement, having surged 88% over the past year.
NARROWING THE GAP WITH SK HYNIX
Samsung is working to close the gap with rival SK Hynix in supplying high bandwidth memory (HBM) chips to Nvidia. The company announced it has begun mass production of next-generation HBM4 chips for Nvidia’s Vera Rubin platform, and plans to sharply increase capital expenditure this year.
However, potential labor disruptions loom as unions representing a majority of Samsung workers in South Korea consider striking over pay. Samsung said it will respond with a dedicated organization to ensure production is not interrupted.
CHIP PRICES HIT MOBILE EARNINGS
Rising conventional chip prices are weighing on Samsung’s other businesses. The mobile and network division saw profit fall 35% in the first quarter to 2.8 trillion won, while the display division reported a 20% drop in operating profit to 400 billion won.
($1 = 1,485.4000 won)