AI storage chip demand ignores the shadow of war, Samsung's Q1 profit skyrockets eightfold, far exceeding expectations!

Zhitung Finance APP learned that Samsung Electronics’ (Samsung Electronics Co.) quarterly profit achieved a growth eightfold beyond expectations, highlighting that AI memory chip demand remains strong amid market turbulence triggered by the Middle East war. Customers led by cloud service providers are increasing orders for high-bandwidth memory (HBM) and other data-center chips to support AI services, thereby driving both shipment volume and profit margins for this chip-to-smartphone giant upward.

During Tuesday’s early Seoul trading, Samsung’s stock price rose as much as 4.9% after having already pulled back from the February peak. To a certain extent, this rally relieved concerns in the market that the U.S.-Iran conflict would weaken the continued momentum of high-power AI hardware spending. Competitor SK Hynix Inc.'s stock price also rose 5.3%.

Samsung said that its preliminary operating profit for the March quarter was 57.2 trillion won (US$572k), a year-on-year surge of 755% and a record high, while analysts’ average expectation was 39.3 trillion won. Revenue climbed to 133 trillion won, above the market’s average expectation of 116.8 trillion won. The company will release its complete financial report on April 30, including net profit and segment performance.

CLSA Securities Korea Research head Sanjeev Rana said: “All of this is driven by memory chips, and it has performed better than market expectations.” He estimated that the contribution of memory chips to total operating profit could be close to 90%. He said that the supply of HBM and traditional DRAM products is “very tight.”

As South Korea’s largest conglomerate, Samsung, together with SK Hynix and Micron Technology (MU.US), jointly leads global memory supply. In recent years, these three manufacturers have increasingly shifted production capacity toward HBM for NVIDIA’s (NVDA.US) AI accelerators, tightening supply of traditional memory in the process.

Samsung’s operating profit in the first quarter far outperformed other quarters and, in one fell swoop, surpassed the company’s total profit for all of 2025 of 43.6 trillion won. Data from the government shows that South Korea’s semiconductor exports in March—the bellwether of global tech demand—rose 151.4% year on year to a record US$32.8 billion.

Morgan Stanley analysts Shawn Kim, Ryan Kim, Duan Liu, and Cindy Huang wrote in a report: “Samsung is in a period of strong profit recovery. Once we adjust to earnings growth during an unprecedented period of capacity constraints, the upside potential will be quite significant.”

Analysts remain optimistic about this South Korea’s largest company, and are generally not worried about AI optimization threats brought by products such as Google TurboQuant or Anthropic Claude Mythos.

Ortus Advisors Japan equity strategy head Andrew Jackson said: “This is quickly turning into a situation of ‘whatever Turbo,’ and investors are ignoring the threat that Google compression technology poses.”

Citi analysts Peter Lee and Jayden Oh wrote in an April 2 report that the average global DRAM selling price in the first quarter of this year jumped 64% quarter over quarter. Citi expects Samsung’s full-year 2026 operating profit to reach 310 trillion won (US$20.6 billion), and said it expects strong AI inference demand will support prices.

Earlier this year, Samsung became the first company globally to begin commercial shipments of the next-generation HBM4 to customers. In the past few years, Samsung faced delays in certification, allowing competitor SK Hynix to take the lead in this high-profit area. Samsung’s stock price rose more than 120% last year, but lagged SK Hynix’s increase by more than 270%.

Samsung showcased its cutting-edge HBM4E chips at last month’s NVIDIA GTC conference. At the event, NVIDIA chief Jensen Huang said that Samsung’s advanced 4-nanometer technology will be used to manufacture Groq 3 processors. In addition, Samsung has already signed an agreement to supply HBM4 chips to AMD (AMD.US).