The electronics division of Samsung has made a huge profit for the first quarter because of the surge in demand for memory chips that increased the price of semiconductors. The electronics division of samsung experts an operating profit of 57.2 trillion won for the quarter, which is a significant jump from the previous year’s figure of 6.69 trillion won. This is more than eight times greater and has exceeded market expectations. Revenue is expected to rise to 133 trillion won because of greater demand for AI data centres.
Samsung’s semiconductor division generated approximately 54 trillion won in operating profit, accounting for about 95% of the company’s total profit, according to analyst estimates. Increased investment by global technology companies into artificial intelligence infrastructure development has driven up memory chip costs. Contract prices for DRAM chips are expected to rise by more than 50% due to ongoing market shortages. The weaker South Korean currency helped earnings growth by increasing the value of international sales when converted into domestic currency.
Despite the strong results, analysts have flagged potential risks. Rising energy costs linked to geopolitical tensions in the Middle East and potential supply disruptions for chip-making materials could lead to growth if demand from AI data centres weakens. Some memory chips have experienced price decreases as customers struggle to absorb higher costs, yet contract prices remain high. Samsung has started shipping its new HBM4 memory chips, which power AI processors, to compete against SK Hynix, but high-bandwidth memory remains a minor segment of total chip sales.
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