Samsung’s first-quarter profit is expected to surge eightfold year-on-year, with the AI chip boom driving a sharp increase in performance.

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The surge in AI infrastructure construction has led to a bottleneck in chip supply, allowing Samsung Electronics to profit from rising prices, with single-quarter profits approaching last year's annual total.

On April 7, Samsung Electronics released its 2026 Q1 earnings forecast in Seoul. According to Samsung's official announcement, the company expects consolidated operating profit for January-March this year to be about 57.2 trillion KRW (approximately $37.9 billion), an increase of more than eightfold year-on-year—compared to only 6.69 trillion KRW for the same period last year.

This figure not only far exceeds market expectations. LSEG SmartEstimate previously predicted Samsung's Q1 operating profit to be 40.6 trillion KRW, with the actual result about 41% higher. Meanwhile, the single-quarter profit of 57.2 trillion KRW is close to Samsung's total operating profit for all of 2025, and nearly doubles the previous quarterly record of 20 trillion KRW set in Q4 2025.

After the announcement, Samsung's share price rose by up to 4.6% to 202,000 KRW in early Tuesday trading, outperforming the composite index which rose about 2%. Currently, the increase has narrowed to less than 3%.

Chip Price Increase Is the Core Driving Force

Samsung’s explosive performance this time stems from the ongoing expansion of AI data center construction.

A surge in demand for computing power has led to tightening supply of traditional DRAM chips used in servers, and prices have risen sharply as a result. According to Reuters, first-quarter chip contract prices nearly doubled. Research firm TrendForce predicts that DRAM contract prices will rise by more than 50% further in the current quarter.

BofA Securities analyst Kim Sunwoo explained the logic behind the performance surpassing expectations: "Due to clients expecting further price increases, actual contract prices were higher than forecasted, which is the reason performance was better than projected."

Analysts estimate Samsung's chip division earned about 54 trillion KRW in operating profit in the quarter, making up about 95% of the company’s total profit. The mobile business contributed about 4 trillion KRW, benefiting from the consumption of low-cost component inventory.

First-quarter consolidated revenue is expected to be about 133 trillion KRW, up around 68% year-on-year.

HBM Catch-Up Progress

About a year earlier, Samsung's CEO publicly apologized for the company’s poor performance and share price. At that time, Samsung lagged behind Korean competitor SK Hynix in supplying high-bandwidth memory (HBM) required for NVIDIA AI chipsets.

Now, Samsung is narrowing the gap with SK Hynix by leveraging its latest generation HBM4 chips, while also benefiting from the recovery in demand for traditional chips driven by AI inference—AI inference refers to the real-time generation of responses by AI models like ChatGPT and consumes large amounts of regular DRAM chips.

Meanwhile, U.S. memory chipmaker Micron Technology last month also forecast Q3 revenue to exceed Wall Street expectations, after recording record-breaking results in the previous quarter, similarly benefiting from booming AI demand and tight supply.

Potential Concern: Price Increase Cycle May Be in Its Late Stage

Despite impressive performance, market concerns about future developments are rising.

Since conflict in the Middle East erupted on February 28, energy costs have risen, key chip raw material supplies face potential disruption, and prospects for AI data center demand are shrouded in uncertainty. Since the outbreak, Samsung’s share price has fallen 11%, though it is still up about 61% year-to-date.

NH Investment & Securities Senior Analyst Ryu Young-ho said, "The market’s worry about memory prices reaching their peak is increasing. It now seems we are past the early stage of the upswing cycle, entering the later stage." He noted that Samsung’s ability to sign long-term contracts with clients to maintain semiconductor profits will be key.

TrendForce Senior Vice President Avril Wu also stated that spot prices for DRAM fell last week, because "end user demand is struggling to absorb the high prices." Spot prices are usually higher than contract prices, and their trend is seen as a leading indicator of market sentiment.

Additionally, Google’s memory-saving technique TurboQuant released last month is also seen as one reason for the recent sell-off in memory chip stocks.

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