(Bloomberg) — Samsung Electronics Co. earned a far stronger-than-expected eight-fold leap in quarterly profit, underscoring robust demand for AI memory chips in the face of markets roiled by war in the Middle East.<\/p>\n
Customers led by cloud service providers are ramping up orders for high-bandwidth memory and other chips used in data centers to feed artificial intelligence services, lifting both volumes and margins at the chips-to-smartphones conglomerate.<\/p>\n
Shares of Samsung, which have slumped from their February peak, rose as much as 4.9% during early morning trading in Seoul on Tuesday, shaking off some of the fears that the US-Iran conflict is hurting the durability of spending on energy-guzzling AI hardware. Shares of rival SK Hynix Inc. gained 5.3%.<\/p>\n
Samsung reported preliminary operating profit of 57.2 trillion won ($37.9 billion) in the March quarter \u2014 up 755% to hit a record \u2014 versus analysts\u2019 average projection for 39.3 trillion won. Revenue climbed to 133 trillion won, against the average estimate of 116.8 trillion won. The company will release a full financial statement, including net income and divisional breakdowns, on April 30.<\/p>\n
\u201cIt\u2019s all driven by memory and it\u2019s stronger than what people anticipated,\u201d said Sanjeev Rana, head of research at CLSA Securities Korea, estimating that memory\u2019s contribution may be close to 90% of total operating profit. Supply is \u201cvery tight\u201d for HBM and conventional DRAM products, he said.<\/p>\n
Korea\u2019s largest company dominates global memory supply along with SK Hynix and Micron Technology Inc. The trio has increasingly shifted production in recent years toward HBM used in Nvidia Corp.\u2019s AI accelerators, tightening supply of conventional memory.<\/p>\n
Samsung\u2019s first-quarter operating profit dwarfs its performance in other quarters and blew past the 43.6 trillion won the company generated in all of 2025. South Korea\u2019s semiconductor exports \u2014 a bellwether of global technology demand \u2014 soared 151.4% in March to a record $32.8 billion, government data show.<\/p>\n
\u201cSamsung is in the midst of a sharp profit recovery cycle,\u201d wrote Morgan Stanley analysts Shawn Kim, Ryan Kim, Duan Liu and Cindy Huang in a report. \u201cSignificant upside exists once we adjust to earnings growth in a period of unprecedented capacity constraints.\u201d<\/p>\n
Analysts remain upbeat on South Korea\u2019s biggest company, largely dismissing concerns about AI optimization by offerings such as Google\u2019s TurboQuant or Anthropic\u2019s Claude Mythos.<\/p>\n
\u201cIt\u2019s fast becoming a case of \u2018Turbowhatever\u2019, with investors glossing over the threat of the Google compression technology,\u201d said Andrew Jackson, head of Japanese equity strategy at Ortus Advisors.<\/p>\n
The average selling price of global DRAM surged 64% in the first quarter from the previous quarter, Citigroup analysts Peter Lee and Jayden Oh wrote in an April 2 report. For Samsung, Citigroup forecasts annual operating profit of 310 trillion won \u2014 or the equivalent of $206 billion \u2014 in 2026, saying it expects strong AI inference demand to sustain pricing.<\/p>\n
Earlier this year, Samsung was first to commercially ship next-generation HBM4 to customers, following years of struggles and qualification delays that allowed rival SK Hynix to dominate the lucrative field. Samsung\u2019s shares gained more than 120% last year, lagging SK Hynix\u2019s more than 270% jump.<\/p>\n
Samsung showcased its cutting-edge HBM4E chip at Nvidia\u2019s GTC event last month, where the US company\u2019s boss Jensen Huang said the Korean company\u2019s advanced 4-nanometer technology will be used to manufacture Groq 3 processors. Samsung has also inked a deal to supply HBM4 chips to Advanced Micro Devices Inc.<\/p>\n
–With assistance from Ville Heiskanen, Shinhye Kang, Kurt Schussler and Lianting Tu.<\/p>\n
(Updates with market reaction and analyst comments from the third paragraph.)<\/p>\n