Updated posts 2026
Samsung Joins Nvidia
In a remarkable turn of events, Samsung Electronics Co. has exceeded analysts’ expectations, marking a significant resurgence in its semiconductor division’s profitability. Bolstered by robust sales of memory chips, particularly fueled by the escalating demand for artificial intelligence (AI) services from tech giants like Microsoft Corp. and Alphabet Inc., Samsung reported a staggering net income of 6.62 trillion won ($4.8 billion) for the March quarter. This figure is more than four times the earnings recorded in the corresponding period of the previous year.
This remarkable financial performance underscores a notable shift in the semiconductor landscape, with a notable rebound in demand for memory chips essential for powering modern electronics and AI applications. As a result of this positive momentum, Samsung’s shares experienced a 1% surge in Seoul trading.
Analysts, including Sanjeev Rana from CLSA Securities Korea, emphasize the exceptional performance of Samsung’s semiconductor division, particularly in the memory segment. This resurgence comes at a critical juncture for Samsung, the world’s largest smartphone manufacturer, as it endeavors to reverse a year-long decline precipitated by global economic uncertainties.
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Indicators of a market rebound are becoming increasingly evident, driven in part by the heightened demand for chips essential for AI development, particularly in the wake of innovations such as OpenAI’s ChatGPT. Samsung’s chip division notably achieved a better-than-projected operating profit of 1.91 trillion won, marking its first quarter of profitability after four consecutive losses. Recent South Korean trade data also highlights the pivotal role of semiconductor shipments in driving export growth, with a notable 43% increase year-on-year in the first 20 days of April.
Memory has always been the most violently cyclical corner of the semiconductor industry, which is what makes a swing from four consecutive loss-making quarters to this result less surprising than it appears. Memory chips are largely interchangeable between manufacturers, so pricing is set by supply against demand rather than by product differentiation, and the handful of producers tend to expand capacity simultaneously when prices rise. The result is a repeating pattern of glut and shortage that has run through the industry for decades. High-bandwidth memory is the partial exception, since it is harder to make and currently supply-constrained — which is precisely why both Samsung and SK Hynix are racing at it.
In its latest earnings release, Samsung expressed optimism regarding sustained chip demand throughout the current quarter and the latter half of the year, citing the burgeoning appetite for generative AI. This sentiment aligns with the financial success reported by tech behemoths like Microsoft and Alphabet, who attribute their outperformance partly to AI services.
Furthermore, Samsung’s strategic moves, including potential supply deals with Nvidia Corp. for its high-bandwidth memory (HBM), signify a concerted effort to strengthen its position in the AI semiconductor market. Samsung’s initiatives in the smartphone and network business also yielded positive results, with an operating profit of 3.5 trillion won during the quarter, driven by robust sales of the Galaxy S24 series.
Looking ahead, Samsung aims to capitalize on the expanding market for HBM, positioning itself to compete with industry leaders like SK Hynix Inc. Recent reports indicate robust revenue growth for Hynix, underlining the buoyant trajectory of overall memory demand. Samsung’s commitment to innovation is evident through its introduction of advanced HBM products, such as the eight-layer HBM3E, with plans for mass production of 12-layer HBM chips in the second quarter, aiming to triple its HBM supply compared to the previous year.
Kim Jaejune, executive vice president for Samsung’s memory business, expressed confidence in the company’s future prospects, anticipating sustained positivity despite potential macroeconomic and geopolitical challenges. Similarly, Kyung Kye-hyun, head of Samsung’s semiconductor business, remains optimistic about the division’s recovery to 2022 levels, highlighting the company’s ambition to restore its previous operating profit benchmarks.
As Samsung navigates through a dynamic semiconductor landscape characterized by evolving technological trends and market dynamics, its strategic endeavors and unwavering commitment to innovation position it as a formidable player in the AI semiconductor boom.
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