Samsung Electronics Posts Record 57 Trillion Won Operating Profit on DRAM, NAND Surge

*Editor's Note: 'AI PRISM' (Personalized Report & Insight Summarizing Media) is an AI-based customized news recommendation and summary service developed with support from the Korea Press Foundation. It selects and provides six tailored news stories for each reader type.

1. Full-Year Operating Profit Targets 320 Trillion Won, 488 Trillion Won Next Year — Aiming to Overtake Nvidia for World No. 1

- Key Summary: Samsung Electronics' first-quarter operating profit surged to 57.2 trillion won, roughly doubling from the previous quarter and setting a new milestone in Korean corporate history. Expansion of the AI inference market drove DRAM contract prices up 39.8% in a single quarter and NAND flash prices up 208.8%. The DS (semiconductor) division is estimated to have accounted for more than 90% of total operating profit at approximately 53 trillion won. Securities analysts project quarterly records will continue — 61.8 trillion won in Q2, 71.9 trillion won in Q3, and 75.9 trillion won in Q4. Some forecasts suggest operating profit could reach as high as 488 trillion won in 2027, potentially surpassing Nvidia for the world's top operating profit. However, the foundry and System LSI divisions are estimated to have posted losses of approximately 1.5 trillion won due to delayed yield stabilization.

2. Defensive Investing Amid Volatile Markets — Covered Call ETF Assets Grow 1.2 Trillion Won in One Month

- Key Summary: As stock market volatility intensifies, defensive capital is flowing rapidly into covered call ETFs. According to Korea Exchange (KRX), net assets of domestically listed covered call ETFs reached 19.3898 trillion won, up 1.2554 trillion won from a month earlier and 4.3525 trillion won from the start of the year. The product attracting the most inflows was KODEX 200 Target Weekly Covered Call (1.3857 trillion won), followed by TIGER Dividend Covered Call Active (672.6 billion won) and KODEX US Dividend Covered Call Active (397.6 billion won). The covered call strategy involves buying the underlying asset while simultaneously selling call options to collect premiums. It is advantageous for defending returns in volatile markets but limits gains in a rising market.

3. Morgan Stanley: "Korea Growth at 1.8% Due to Middle East War — Second Supplementary Budget Possible in H2"

- Key Summary: Global investment bank Morgan Stanley cut its 2025 South Korea GDP growth forecast by 0.3 percentage points from 2.1% to 1.8%, citing geopolitical tensions from the Middle East. Kathleen Oh, Morgan Stanley's chief Korea economist, pointed to weakening non-semiconductor export recovery and consumption slowdown driven by high oil prices as reasons for the downgrade, forecasting 2025 consumer prices at 2.4%. She said a second supplementary budget in the second half is highly likely following the first (expected on the 10th of this month). The Bank of Korea's rate hike timing is now projected three quarters earlier than previously forecast, with increases expected in Q4 2026 and Q1 2027. The terminal policy rate is forecast to reach 3.0% after two hikes.

4. Korea's First BDC Sets Sail, but Listing Timeline Remains Cautious

- Key Summary: The country's first Business Development Company (BDC) product, designed to give retail investors access to unlisted venture investment opportunities, has begun investor recruitment under Shinhan Asset Management's lead. Shinhan BDC No. 1 charges an annual management fee of 1.04%, lower than typical venture funds (around 2%), and adopts a structure that takes 20% of returns exceeding 8% per year (simple interest) as performance fees. Its core strategies consist of "venture secondary" — selective investment in pre-IPO stage companies' existing shares — and "credit" strategy involving direct lending and mezzanine (convertible bonds, etc.) investments in venture and innovative companies. However, actual KOSDAQ listing and product launches by other asset managers remain uncertain due to delays in National Assembly review of amendments to the Special Tax Treatment Control Act that would provide tax benefits.

5. Q1 Operating Profit of 57 Trillion Won — Samsung's KOSPI Market Cap Share Hits Six-Year High

- Key Summary: Samsung Electronics' share of KOSPI market capitalization reached 25.70%, the highest since March 2020, early in the COVID-19 pandemic — approximately six years ago. Samsung's stock declined only 9.9% from just before the war broke out, less than the KOSPI's 12.9% drop over the same period, with this relative outperformance translating into an expanded market cap share. First-quarter revenue of 133 trillion won and operating profit of 57.2 trillion won were evaluated as a super surprise, far exceeding market consensus of 117 trillion won in revenue and 38 trillion won in operating profit. Forecasts for continued earnings growth remain dominant, driven by increasing semiconductor demand from expanding AI investment worldwide.

6. War Shock Drives POSCO to Raise All Steel Product Prices — Burden Grows for Auto and Shipbuilding Sectors

- Key Summary: POSCO Holdings (005490.KS), Korea's largest steelmaker, raised second-quarter prices across all steel products by 50,000 won per ton, citing surging energy and logistics costs stemming from the Middle East. Hyundai Steel (004020.KS) is also pursuing increases of the same magnitude. Australian coking coal prices climbed from $217 per ton at the start of the year to $237, and combined with the sharp rise in the won-dollar exchange rate and shipping costs, cost pressures on steelmakers reached a critical point. This round of increases also raises prices for direct-delivery contracts with large manufacturers, making higher input costs unavoidable across steel-consuming industries including automobiles, shipbuilding, and home appliances. Meanwhile, with anti-dumping investigations limiting the inflow of cheap Chinese steel, the price hikes are also seen as a normalization of market prices.