Samsung Electronics estimates $37.9 bil. ‘super surprise’ profit for Q1

The Korean national flag and Samsung flag are seen displayed at Samsung Electronics' office in Seocho District, Seoul, in this undated photo. Korea Times file

Samsung Electronics on Tuesday predicted an operating profit of 57.2 trillion won ($37.9 billion) and 133 trillion won in sales in its earnings guidance for the first quarter of this year, achieving record-breaking profitability amid a global surge in demand for artificial intelligence (AI) chips.

The company's operating profit soared 755 percent from a year earlier, while sales also jumped 68 percent during the same period.

It is the first time in Samsung Electronics’ history that its quarterly operating profit and sales have exceeded 50 trillion won and 100 trillion won, respectively. The first-quarter operating profit also surpassed the company’s entire 2025 operating profit of 43.6 trillion won.

The numbers far outpaced brokerages’ earnings consensus of 38.1 trillion won in operating profit and 117 trillion won in sales, prompting analysts to describe the guidance as a “super surprise.”

Based on recently reported quarterly results of major companies, Samsung Electronics has become the world’s fourth-most-profitable company, trailing Apple with $50.9 billion, Saudi Aramco with $41.3 billion and Microsoft with $38.3 billion, while surpassing Alphabet at $35.9 billion. Although direct comparisons are limited as the figures span different fiscal periods, the AI-driven boom highlights Samsung’s sharply improved profitability.

The earnings eased concerns over a potential downturn in the memory market, fueled by Google’s TurboQuant, a technology that reduces AI memory use, as well as a potential peak in memory prices and global supply chain uncertainties stemming from the Middle East conflict.

As this is an earnings guidance, Samsung Electronics did not provide a breakdown. However, the strong performance is believed to have been driven by its semiconductor business.

Meritz Securities analyst Kim Sun-woo estimated Samsung Electronics’ memory business would post more than 54 trillion won in operating profit, though its foundry and chip designing business may have suffered an operating loss of 1.6 trillion won.

The surge was fueled by explosive demand for memory chips amid the expansion of the AI industry. Samsung Electronics recently began shipments of its mass-produced sixth-generation high-bandwidth memory 4. Prices of legacy DRAM used in servers, PCs and mobile devices also rose sharply, providing an additional boost.

Against this backdrop, Big Tech companies in recent months have signed pricey long-term memory supply agreements with Samsung Electronics as they prioritize securing supply over price negotiations. Reportedly, DRAM contract prices for the second quarter are being negotiated at more than a 30 percent increase from the first quarter, and long-term agreements of three to five years are being signed at minimum prices set above first-quarter levels.

“Prices of both DRAM and NAND are estimated to have surged by more than 90 percent,” Kim said. “This likely reflects aggressive and bold pricing strategies, as well as favorable price structuring, based on the company’s status as a leading player … Though it was an all-time high, the latest earnings also need to be viewed in the context that the current memory cycle is only approaching the mid-cycle stage.”

“In the second quarter of 2026, a surprise is expected in memory chips for mobile devices, as major mobile clients are accepting higher prices," Daishin Securities analyst Ryu Hyung-keun noted. "This marks a favorable shift for Samsung Electronics, which has a higher exposure to mobile compared to its competitors.”

Morgan Stanley also said in a report that Samsung is at the center of a sharp earnings recovery cycle. It noted that the company's share price has risen 61 percent since the start of the year, outperforming the KOSPI’s 29 percent gain, but this may not fully reflect the scale of changes ahead.

Samsung Electronics will announce its final financial result for the first quarter during an earnings call on April 30.