Samsung Electronics reported a record-breaking performance for the first quarter on Thursday, with operating profit surging 750% year-on-year, driven largely by soaring demand for artificial intelligence (AI)-related semiconductors. The company also signaled that strong demand is expected to continue into the next quarter.
The South Korean tech giant, alongside rival SK hynix, has become a critical supplier of high-performance chips used in AI development, as global technology firms race to expand computing capacity for advanced applications.
Samsung said in its earnings statement that it 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), surpassing earlier expectations set by the company itself.
Net profit climbed to 47.1 trillion won, exceeding analyst forecasts, while revenue hit an all-time quarterly high of 133.9 trillion won.
The company’s semiconductor division delivered particularly strong results, with profits jumping to 53.7 trillion won, accounting for the majority of overall earnings. Samsung attributed the performance to rising demand for high-value AI memory chips and broader industry-wide price increases caused by tight supply.
“Strong memory demand is expected to continue” into the second quarter, the company said, as global investment in AI infrastructure accelerates.
Chief Financial Officer Park Soon-cheol dismissed concerns about potential supply disruptions linked to Middle East tensions, stating that semiconductor production is operating normally. He added that logistical risks remain limited due to diversified trade routes and established partnerships in the US, Japan, and other regions.
Following the earnings announcement, South Korea’s Kospi index briefly climbed to a record high above 6,700 points, buoyed by strong results from global tech leaders including Microsoft and Alphabet. Samsung shares, however, dipped in early trading.
AI boom fuels market surge
Samsung’s stock has risen roughly 300% over the past year, reflecting investor enthusiasm over the global AI boom and its impact on South Korea’s technology sector.
A key driver of growth has been high-bandwidth memory (HBM) chips, widely used in AI accelerators and data centers. Strong demand from major tech firms has not only boosted Samsung’s earnings but also contributed to rising prices for other semiconductor products used in consumer electronics, raising the possibility of higher costs for devices such as smartphones and laptops.
Labor tensions and legal pressure
Despite strong financial performance, Samsung faces domestic labor unrest. Tens of thousands of unionized workers recently staged protests in Pyeongtaek, south of Seoul, demanding a 7% wage increase, improved bonuses, and additional benefits. Unions representing nearly 90,000 employees have warned of a potential strike between May 21 and June 7 if negotiations fail.
The company said it would take all lawful measures to maintain production continuity in the event of industrial action.
Samsung is also dealing with legal challenges in the United States, where it faces allegations of patent infringement related to its foldable smartphone lineup, including the Galaxy Z Fold, Z Flip, and Z TriFold devices.
Meanwhile, SK hynix also reported a record quarter last week, with net profit rising nearly 400%, underscoring the strength of the global semiconductor market driven by AI expansion.
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