Samsung Electronics reported a remarkable surge in operating profit for the first quarter, propelled by a resurgence in memory chip prices driven by optimism surrounding AI computing.
Samsung’s operational profit surged by 932.8% in the first quarter, driven by rising interest in AI applications and the recovery of memory chip prices. The company’s revenue increased by 12.81% from the previous year to 71.92 trillion Korean won.
Samsung’s outstanding financial results align with its previous guidance, which predicted that operating profit for the January–March quarter would increase significantly to 6.6 trillion Korean won, and revenue to 71 trillion won. The company credited this success to the strong sales of its flagship Galaxy S24 handsets and the recovery in memory chip pricing.
According to Citi analysts, the growing demand for AI computing is expected to drive positive prospects for Samsung’s NAND flash memory business. They emphasized Samsung’s critical role in satisfying the increasing demand for fast memory chips necessary for AI training.
Samsung’s core semiconductor manufacturing business saw a notable upsurge, with an operating profit of 1.91 trillion Korean won in the first quarter. This upsurge highlights the cyclical nature and starkly contrasts the prior year’s losses.
The need for memory chips with greater capacities and quicker speeds is expected to grow as AI computation grows more complex. With intentions to mass produce cutting-edge memory products like HBM3E 12H and 128GB DDR5 chips in the coming months, Samsung is well-positioned to benefit from this trend.
Despite macroeconomic uncertainty and geopolitical tensions, Samsung is optimistic about the operating environment and expects continued demand supported by generative AI in the second part of the year. The company’s continuous advancements in 3-nanometer and 2-nanometer chip processes demonstrate its commitment to pushing the boundaries of technology.
The steady profitability of Samsung’s mobile business can be attributed to the success of the Galaxy S24 series. When AI features were included, positive consumer feedback increased revenue and operating profit. However, Samsung does expect seasonal shifts in smartphone demand in the second quarter.