Samsung Electronics disclosed achieving a record quarterly profit, largely powered by a fiftyfold surge in earnings from its chip segment, and projected an exacerbation of the severe supply shortage next year as clientele boost investments in artificial intelligence, inevitably driving up prices for its memory components.
The world’s leading memory chip vendor by sales volume also revealed it has secured multi-year, binding agreements with customers aiming to guarantee their future supply, though specific names and terms of these deals were withheld.
“Our deliveries are significantly lagging behind customer requirements,” stated Kim Jae-joon, the executive overseeing Samsung’s memory chip division, addressing analysts. “Based purely on the demand anticipated for 2027, the gap between what is needed and what can be supplied in 2027 will be even wider than it is in 2026.”
Kim pointed out that the continued advancement of AI technologies is set to sustain demand growth, yet supply constraints will persist given the considerable lead time necessary for constructing new fabrication plants.
Samsung reported that the operating profit from its high-margin chip division reached an unprecedented 53.7 trillion won ($36.15 billion) for the January-to-March period, a massive leap from just 1.1 trillion won during the corresponding period the previous year. This figure accounted for 94% of the quarter’s overall record total of 57.2 trillion won. This result aligns with the preliminary estimate Samsung issued earlier this month and dwarfs the 6.69 trillion won result recorded a year prior. Total revenue saw a 69% year-over-year increase, reaching 133.9 trillion won.
The company assured that the conflict in the Middle East has not disrupted chip production, as the firm has secured adequate inventory levels and diversified the suppliers for gases essential to manufacturing. Nevertheless, it highlighted the potential for increased shipping expenses due to rising oil prices and affirmed its commitment to ensuring stable electricity supplies in collaboration with the South Korean government.
Samsung’s shares experienced a slight decline of 0.8% following the release of its financial figures, after initially climbing 1.8% post-announcement. Year-to-date, the company’s stock has appreciated by 88%, outperforming the broader market’s gain of 59%.
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