Samsung Electronics (005930.KS), the world's largest memory chipmaker, disclosed Monday that it posted preliminary revenue of 133.3 trillion won and operating profit of 57.2 trillion won for the first quarter of this year.
Samsung is the first Korean company to surpass 130 trillion won in quarterly revenue and 50 trillion won in quarterly operating profit. The first-quarter operating profit alone exceeded the company's full-year operating profit last year (43.6 trillion won) by 13.6 trillion won.
The results marked an "earnings surprise," beating market expectations by more than 30%.
The consensus estimate for Samsung's first quarter over the most recent one-month period stood at approximately 123.4 trillion won in revenue and 43.7 trillion won in operating profit. Actual preliminary revenue and operating profit exceeded consensus by 7.7% and 30.8%, respectively.
Semiconductors Ride the AI Super Cycle — Operating Profit Soars Past 50 Trillion Won
Although a detailed breakdown by division was not released Monday, securities analysts estimate that the Device Solutions (DS) division, which oversees the semiconductor business, posted operating profit far exceeding 50 trillion won, driving the company-wide results. This represents more than a threefold surge from the previous quarter's DS operating profit of 16.4 trillion won.
Behind the record results is a steep rise in memory chip prices fueled by the AI boom. The industry estimates that prices for commodity DRAM and NAND flash jumped approximately 90% quarter-on-quarter in the first quarter. Samsung, with the world's largest memory production capacity, leveraged its overwhelming pricing power to generate explosive profits.
According to industry sources, operating profit surged as price increases were reflected during the renegotiation of long-term contract volumes for DRAM and NAND flash in the first quarter. Revenue from High Bandwidth Memory (HBM) also expanded three- to fourfold compared to the previous year.
Regaining next-generation technology leadership also played a key role. In February, Samsung became the first in the world to begin mass production and shipment of sixth-generation High Bandwidth Memory (HBM4), the highest-performance HBM available, moving to secure market dominance. Additionally, the recent dollar strength (won weakness) served as a favorable tailwind for the export-heavy semiconductor industry, maximizing profits when converted into won.
Set Business Hit by 'Component Cost Paradox' — Mixed Results Across Divisions
While semiconductors soared, the Device eXperience (DX) division, which handles finished products (sets), is estimated to have posted somewhat weak results after being caught in the crossfire of surging chip prices. Profitability deteriorated as procurement costs for core components such as memory rose sharply.
The Mobile eXperience (MX) and Networks division, responsible for smartphones and telecommunications equipment, is estimated to have posted first-quarter operating profit of only around 2 trillion won. That represents a roughly 50% plunge from 4.3 trillion won in the same period last year. The Visual Display (VD) and Digital Appliances (DA) division, covering TVs and home appliances, is also expected to have either remained in the red following a 600 billion won loss in the previous quarter or managed only a small return to profit.
Separately, subsidiary Samsung Display (SDC) is estimated to have posted solid operating profit of around 1 trillion won, while Harman, the automotive electronics unit, is estimated at 200 billion to 300 billion won, according to industry estimates.
"The Second Half Will Be Even Stronger" — Target Prices Settle in 300,000 Won Range
Industry players and securities analysts expect this unprecedented super-boom to last at least through the end of this year. Samsung is the world's only semiconductor company capable of offering a one-stop solution spanning memory, logic, foundry and advanced packaging on top of its No. 1 memory production capacity, positioning it as the biggest beneficiary of this "AI super cycle," analysts said.
As actual figures exceeded market expectations, brokerages are undertaking sweeping revisions to their earnings forecasts and target prices. Korea Investment & Securities raised its full-year operating profit consensus for Samsung from 202 trillion won to 302 trillion won — a 50% jump in one stroke.
"Starting from the first quarter, Samsung has entered an acceleration phase of operating profit growth and will continue to deliver results above consensus," KB Securities said. "Memory price increases will persist beyond the second quarter, with upward momentum strengthening further into the second half."
Accordingly, major brokerages' target prices — recently raised in succession to 300,000 won by Citi, 300,000 won by Mirae Asset Securities, and 320,000 won by KB Securities — are expected to firmly settle in the 300,000 won range.