Three months' earnings equal a full year! What happened at Samsung Electronics
Samsung Electronics (005930.KS), the world's largest memory chipmaker, opened a new era of quarterly operating profit exceeding 50 trillion won, powered by a super-boom in memory semiconductors essential for artificial intelligence (AI) computing. The company rewrote history just one quarter after becoming the first Korean company to surpass 20 trillion won in quarterly operating profit in the fourth quarter of last year.
Samsung Electronics disclosed on the 7th that its consolidated first-quarter operating profit for this year was preliminarily estimated at 57.2 trillion won ($41.9 billion), a 755% increase year-on-year. Revenue came in at 133 trillion won ($97.4 billion), up 68.1% from the same period last year. It marks the first time since the company's founding that quarterly revenue and operating profit simultaneously exceeded 100 trillion won and 50 trillion won, respectively.
The first-quarter operating profit nearly tripled the previous record of 20.1 trillion won posted in the fourth quarter of last year. The company achieved the remarkable feat of surpassing its entire full-year 2024 operating profit of 43.6 trillion won in a single quarter. The figure approaches the 58.9 trillion won in annual operating profit recorded in 2018, the previous peak of the semiconductor super-cycle.
The result was a resounding earnings surprise, far exceeding market expectations. It topped the securities industry's consensus operating profit forecast of 43.7637 trillion won compiled by FnGuide over the most recent one-month period by 30.7%. The result even surpassed the most aggressive pre-announcement estimate of 54 trillion won from Meritz Securities.
Semiconductors Ride the AI Super-Cycle… Operating Profit Soars Past 50 Trillion Won
Although detailed divisional results were not released on the day, securities analysts estimate that the Device Solutions (DS) division, which oversees the semiconductor business, posted operating profit well above 50 trillion won, driving the company's overall performance. This represents more than a threefold surge from the DS division's operating profit of 16.4 trillion won in the previous quarter.
Behind the record-breaking results lies a steep rise in memory semiconductor prices driven by the AI boom. The industry estimates that prices of commodity DRAM and NAND flash rose approximately 90% quarter-on-quarter in the first quarter. Samsung Electronics, with the world's largest memory production capacity, reaped explosive profits on the back of overwhelming pricing power.
The company's recovery of next-generation technological leadership also played a key role. In February, Samsung Electronics became the first in the world to begin mass-production shipments of its highest-performance sixth-generation High Bandwidth Memory (HBM4), moving to secure market dominance. In addition, given the semiconductor industry's heavy export weighting, the recent strong dollar (weak won) trend served as an added tailwind, maximizing profits when converted into won.
Set Business Hit by 'Component Cost Paradox'… Mixed Results Across Divisions
While semiconductors soared spectacularly, the Device eXperience (DX) division handling finished products (sets) is analyzed to have delivered somewhat lackluster results, caught in the crossfire of surging semiconductor prices. Procurement costs for key components including memory rose sharply, eroding profitability.
The Mobile eXperience (MX) and Networks division, responsible for smartphones and telecommunications equipment, is estimated to have posted first-quarter operating profit in the 2 trillion won range. That represents a roughly 50% plunge compared with operating profit of 4.3 trillion won in the year-ago period. The Visual Display (VD) and Digital Appliances (DA) division, overseeing TVs and home appliances, is also forecast to have either remained in the red following a 600 billion won loss in the previous quarter or managed only a marginal return to profit.
Separately, subsidiary Samsung Display (SDC) is estimated to have generated operating profit of 1 trillion won, while Harman, which handles the automotive electronics business, is estimated to have posted solid operating profit in the 200 billion to 300 billion won range, according to industry estimates.
"The Second Half Will Be Even Stronger"… Target Prices Firmly Anchored in 300,000 Won Range
Industry participants and securities analysts expect this unprecedented super-boom to continue at minimum throughout this year. Samsung Electronics is the world's only semiconductor company capable of offering a one-stop solution spanning not just the No. 1 memory production capacity but also logic, foundry, and advanced packaging. Analysts say this positions Samsung as the biggest beneficiary of the current AI super-cycle.
With actual figures exceeding market expectations, securities firms are also broadly revising their earnings estimates and target prices upward. Korea Investment & Securities raised its full-year 2025 operating profit consensus for Samsung Electronics by 50% in one stroke, from 202 trillion won to 302 trillion won.
KB Securities forecast that "entering an acceleration phase for operating profit growth starting from the first quarter, the company will continue to deliver results exceeding consensus," adding that "memory price increases will persist beyond the second quarter, with upward momentum intensifying further into the second half." Accordingly, with major brokerages recently raising target prices in succession — Citi to 300,000 won, Mirae Asset Securities to 300,000 won, and KB Securities to 320,000 won — the rally in target prices is expected to be firmly anchored in the 300,000 won range.
