Key Highlights
- First-quarter operating profit jumped to 57.2 trillion won, marking an increase exceeding 750% compared to the previous year
- Semiconductor business generated 53.7 trillion won, representing more than 90% of overall company profits
- Commercial HBM4 memory chip production launched for Nvidia’s upcoming Vera Rubin AI architecture
- Memory supply constraints projected to intensify through 2027 amid accelerating AI infrastructure investments
- Consumer electronics and screen businesses faced margin pressure from elevated input costs
Samsung Electronics delivered unprecedented first-quarter financial results on Thursday, with operating profit surging more than 750% year-over-year to reach 57.2 trillion Korean won (approximately $38.5 billion). The company reported quarterly revenue of 133.9 trillion won, reflecting 69% annual growth and exceeding Wall Street projections across all metrics.
The extraordinary performance stemmed predominantly from a single source: semiconductor sales.
The Device Solutions division—encompassing memory and chip manufacturing—generated 53.7 trillion won in operating income, a dramatic increase from merely 1.1 trillion won during the comparable period last year. This represents a staggering 49-times multiplication within twelve months and constituted 94% of Samsung’s entire quarterly profit.
A worldwide scarcity of memory semiconductors, propelled by unprecedented AI data center expansion, has driven pricing substantially upward. Samsung has emerged as a primary beneficiary of this trend. The corporation’s operating margin within its semiconductor segment surpassed 70% during the first quarter, outperforming both Nvidia and TSMC during the identical timeframe, according to data from Counterpoint Research.
The company additionally disclosed that it has secured long-term binding agreements with clients seeking guaranteed supply allocations—an indication of the extraordinary market tightness.
HBM4 Launch and Competition With SK Hynix
Samsung announced it initiated commercial-scale production and sales of HBM4 memory chips in February, establishing itself as the first manufacturer to deliver sixth-generation high-bandwidth memory to customers. These advanced chips will power Nvidia’s forthcoming Vera Rubin AI computing platform.
SK Hynix has maintained market leadership in the HBM segment, capturing 57% of revenue share in the fourth quarter of 2025 according to Counterpoint Research analysis. The competitor distributed HBM4 engineering samples to clients in March 2024 and completed mass production readiness by September, though commercial shipments have not been publicly confirmed.
Industry observers note the competitive dynamics are shifting. “Samsung has achieved significant advances in HBM4 technology and the performance differential against SK Hynix has narrowed compared to earlier generations,” noted Ray Wang at SemiAnalysis, while acknowledging that SK Hynix retains overall technological leadership.
Samsung projected that its HBM-related revenue will more than triple in the current year versus 2026 levels.
Memory Supply Shortage Expected to Worsen
Kim Jaejune, Samsung’s memory business leader, informed analysts Thursday that current demand fulfillment rates have fallen to historic lows. Customers concerned about future availability are preemptively placing orders for 2027 delivery.
“Evaluating exclusively the demand commitments already received for 2027, the imbalance between supply capacity and customer requirements for 2027 will expand even beyond 2026 levels,” Kim explained.
The organization intends to substantially boost capital investments this year to address capacity constraints.
Samsung is simultaneously monitoring potential workforce challenges. Labor unions representing the majority of employees in its semiconductor operations are contemplating strike action regarding compensation terms. Management stated it has established a specialized task force to mitigate any manufacturing interruptions.
Regarding cost pressures, the elevated chip pricing that benefits the memory segment is creating headwinds elsewhere within Samsung’s portfolio. The mobile device division experienced a 35% profit decline in the first quarter to 2.8 trillion won, impacted by increased component expenses. The display business similarly recorded a 20% profit reduction to 400 billion won.
Samsung’s stock price initially climbed as much as 1.8% following the earnings announcement before reversing course to finish 2.4% lower on the day, with market analysts attributing the decline to profit-taking following an 88% appreciation year-to-date.
