Samsung hits record profit as AI demand grows

Samsung Electronics said Thursday that its operating profit surged 750 percent year-on-year to a record high in the first quarter, driven by robust sales of chips essential for artificial intelligence, while forecasting continued strong demand in the coming months, News.Az reports, citing AFP.

The South Korean tech giant has become a major player—alongside rival SK hynix—in supplying high-performance semiconductors sought by companies racing to keep pace with the rapidly evolving AI industry.

Their strong results come as the South Korea government pushes to position the country among the world’s top three AI powers, alongside the United States and China.

In its earnings report, Samsung said it had “achieved record quarterly revenue and operating profit through AI technology innovations and proactive market response.”

Operating profit reached 57.2 trillion won ($38.4 billion), confirming earlier guidance that pointed to a record-breaking quarter.

Net profit totaled 47.1 trillion won, surpassing analyst expectations in a Bloomberg survey, while revenue climbed to an all-time quarterly high of 133.9 trillion won.

The company’s semiconductor division also exceeded expectations, posting a sharp rise in profit to 53.7 trillion won and accounting for the majority of overall earnings.

Samsung said its memory business “surpassed its quarterly sales record by addressing high-value-added AI demand despite limited supply availability,” adding that rising industry-wide memory prices also contributed to the performance.

The company expects “strong memory demand to continue” into the second quarter as investment in AI infrastructure accelerates.

Chief financial officer Park Soon-cheol downplayed concerns about supply chain disruptions linked to the Middle East conflict, stating that “semiconductor production lines are currently operating normally.”

He added that risks remain limited due to secured logistics routes and diversified trade partnerships in the United States, Japan, and other regions.

Following the results, South Korea’s benchmark KOSPI index climbed to a new record above 6,700 points, supported by strong earnings from U.S. tech giants Microsoft and Alphabet.

Samsung shares, however, were lower in early trading despite having surged roughly 300 percent over the past year, fueled by the AI boom and broader economic growth.

The company has benefited from rising orders by major technology firms for high-bandwidth memory, a key component used in data centers and AI accelerators designed for intensive computing tasks.

At the same time, increased demand is driving up costs for more conventional chips used in consumer electronics, raising the prospect of higher prices for smartphones, laptops, and other devices worldwide.

Samsung also faces potential labor unrest, with a strike looming next month as workers demand higher wages and bonuses.

Tens of thousands of unionized employees recently held a rally outside the company’s plant in Pyeongtaek, south of Seoul, calling for a seven-percent pay increase, the removal of bonus caps, and improved benefits.

Unions representing nearly 90,000 workers have warned they will strike from May 21 to June 7 if an agreement is not reached with management.

Park said the company would “respond to the fullest extent within the legal scope” to ensure production continues even in the event of a strike.

In addition, Samsung is facing a lawsuit in the United States alleging it violated patents related to foldable smartphone technology by producing and selling Galaxy Z Fold, Z Flip, and Z TriFold devices without authorization, according to court filings.

Meanwhile, SK hynix reported last week that its net profit jumped nearly 400 percent to a record high in the first quarter.

News.Az 

By Nijat Babayev