Samsung’s Chip Profits Surge 48-Fold Amid AI Boom

Samsung's semiconductor division reported record profits, surpassing expectations.

Samsung’s semiconductor division reported record profits in the first quarter, surpassing expert expectations, according to Bloomberg.

The 48-fold increase was driven by high margins on equipment for AI infrastructure and data centers. The operating profit of the company, a competitor to SK Hynix and Micron Technology, reached 53.7 trillion won ($36 billion), while analysts had anticipated 35.3 trillion won.

The results reflect significant spending by hyperscalers to support AI operations. Meta and Alphabet have planned to increase capital expenditures.

Some investors believe that high-bandwidth memory has moved beyond traditional boom-and-bust cycles and can demonstrate stable growth.

“The pertinent question is duration: how long will the pricing power of HBM4 last, and will infrastructure spending remain sustainable?” noted Dave Mazza, CEO of Roundhill Investments.

Samsung plans to “significantly” increase capital investments this year and is preparing for the release of HBM4e, the next-generation memory chips for AI.

“The company has limited stockpiles that do not meet client demand,” stated one of the firm’s executives.

The performance of Nvidia accelerators is limited by the speed and volume of memory that supplies data. As a result, DRAM becomes a key factor in the quality of AI services.

Cloud service providers are paying for increasingly expensive memory, which is reflected in Samsung’s shares: they have risen by 88% this year following a doubling last year.

Memory Prices Set to Rise Further

Analysts believe Samsung’s chip division will set new profit records in the coming quarters as contract prices continue to rise amid limited supply. They cite a more than 180% increase in semiconductor exports from Korea in the first 20 days of April as evidence.

Tom Kang, an analyst at Counterpoint Research, forecasts a 60% rise in DRAM prices this quarter compared to the previous one. From February to March, they have already increased by 42%.

Earlier, Samsung considered transitioning to multi-year contracts for memory chip supply.