Shut-up of emblem for Samsung on analysis constructing within the Silicon Valley, Mountain View, California, October 28, 2018.
Smith Assortment/gado | Archive Pictures | Getty Photos
Samsung Electronics reported an over eightfold enhance in first-quarter working earnings on Thursday, hitting a brand new file and beating analysts’ estimates on the explosive progress of its chip enterprise.
Listed here are Samsung’s first-quarter outcomes in contrast with LSEG SmartEstimate, which is weighted towards forecasts from analysts who’re extra constantly correct:
- Income: 133.9 trillion Korean received ($89.96 billion) vs. 132.69 trillion received anticipated
- Working revenue: 57.2 trillion received vs. 55.28 trillion received anticipated
The South Korean expertise big’s quarterly revenue climbed greater than 750% from a 12 months earlier to a recent file. The corporate additionally posted file income, up about 70% 12 months over 12 months.
The earnings got here consistent with Samsung’s personal estimates of 57.2 trillion received and exceeded its full-year 2025 earnings of 43.6 trillion received.
The earnings lengthen momentum from the ultimate quarter of final 12 months, when Samsung surpassed its prior file of 17.6 trillion received set within the third quarter of 2018.
Samsung’s file earnings got here on the energy of its chip enterprise. In addition to its smartphone enterprise and semiconductor foundry providers, the agency is a serious producer of reminiscence chips.
The agency’s chip enterprise has emerged as a serious beneficiary of the worldwide AI information heart increase, which has constrained provide and pushed up costs of reminiscence chips utilized in information facilities and electronics equivalent to smartphones, PCs and sport consoles.
Samsung stated in an earnings report that it expects server reminiscence demand to stay sturdy into the second half of the 12 months as hyperscalers proceed to accommodate AI adoption and demand for agentic AI accelerates.
The corporate’s shares jumped about 1% in South Korea after the earnings launch, however pared these good points in afternoon commerce, falling 0.8%. Its shares are up round 90% to date this 12 months.
Chip energy
Samsung’s chip enterprise, also called its DS (System Options) division, encompasses its reminiscence chip, semiconductor design and foundry enterprise models.
The division posted an working revenue of 53.7 trillion Korean received within the first quarter, in contrast with nearly 1 trillion Korean received in the identical interval final 12 months. These earnings accounted for greater than 90% of the corporate’s whole earnings for the quarter.
In the meantime, total chip gross sales reached 81.7 trillion Korean received, up 225% from final 12 months.
The sturdy exhibiting comes as Samsung continues to increase its high-bandwidth reminiscence, or HBM, enterprise, a key part in AI information heart chips.
Chipmakers equivalent to Nvidia — the world’s most dear firm — have pushed demand for HBM, amid restricted provides.
As producers prioritize manufacturing for higher-margin AI functions, provide constraints have pushed up costs for reminiscence utilized in shopper electronics.
Samsung stated Thursday that its reminiscence enterprise “surpassed its quarterly gross sales file by addressing high-value-added AI demand regardless of restricted provide availability, with industry-wide reminiscence value will increase additionally a contributing issue.”
In the meantime, an government stated throughout an earnings name that obtainable reminiscence provide stays far behind buyer demand.
“Our demand success fee is now at a file low, and in contrast to earlier years, clients who’re involved about provide shortages are literally bringing ahead their demand for 2027,” they stated, including that the availability and demand hole is anticipated to widen additional in 2027.
Excessive bandwidth reminiscence
Regardless of rising earnings, Samsung has continued to face sturdy competitors within the HBM enterprise, after giving up an early result in rival SK Hynix.
Samsung has been racing to catch as much as SK Hynix within the profitable expertise, saying in February that it grew to become the primary on the earth to mass-produce HBM4 reminiscence chips and ship them to unnamed clients.
HBM4 is the sixth era of HBM expertise and essentially the most superior model thus far. It’s anticipated to be the principle AI reminiscence chip utilized in Nvidia’s next-generation Vera Rubin structure, designed for highly effective AI workloads in information facilities.
SK Hynix first introduced that it was sending samples of its HBM4 to clients in March of final 12 months and stated it had ready HBM4 for mass manufacturing in September. Nonetheless, the corporate is but to announce business shipments of HBM4.
“Samsung has made enhancements in HBM4 and the hole towards SK Hynix is narrower versus earlier generations of HBM,” stated Ray Wang, analyst at SemiAnalysis, the place he leads the corporate’s reminiscence protection from Seoul.
“But we proceed to see SK Hynix main the HBM race versus its friends,” he added.
Based on information from Counterpoint Analysis, SK Hynix continued to steer HBM with a 57% income market share within the closing quarter of final 12 months.
Headwinds?
Whereas Samsung’s chip enterprise is anticipated to proceed benefiting from rising reminiscence costs, the pattern may negatively have an effect on its different enterprise segments.
Larger costs of reminiscence chips broadly utilized in shopper electronics items are anticipated to strain Samsung’s smartphone and home-appliance companies.
In the meantime, the corporate stated in its earnings name on Thursday that it’s going to proceed to observe the battle within the Center East, which poses a threat to Samsung’s uncooked materials and power provide chains.
