AI Boom Drives Samsung Profit Surge

Samsung Electronics is expected to post a sharp jump in earnings for the first quarter of 2024, with operating profit projected to rise about six-fold to 40.5 trillion won ($26.9 billion). The estimate, drawn from an LSEG SmartEstimate based on 29 analysts, would represent a quarterly record and would come close to the company’s full-year operating income from the prior year.

The same forecast points to a strong top-line rebound, with revenue anticipated to increase by 50%. Analysts attributed the profit surge primarily to higher memory chip prices, which have been supported by demand linked to artificial intelligence workloads and the buildout of AI-related computing capacity.

Even with the upbeat earnings outlook, market participants have flagged risks tied to geopolitics and supply conditions. Concerns have centered on the Middle East conflict, which officials and analysts have warned could push energy costs higher and interrupt the flow of materials. Those pressures, in turn, could weigh on investment plans for AI data centers, a key source of demand for advanced memory.

Samsung’s share price has also faced near-term headwinds. The stock has fallen 14% since February 28, a move linked to easing spot prices for DRAM (dynamic random access memory) chips and the introduction by Google of a memory-saving technology called TurboQuant. Despite that pullback, Samsung shares remain up 50% year-to-date.

On pricing, analysts have continued to point to tight supply conditions. They described a severe shortage of memory chips and said conventional contract prices for DRAM are expected to keep climbing. The forecast calls for a 58–63% increase in the April–June period, after contract prices doubled in the first quarter.

Samsung is also reported to be in discussions with major customers about three-to-five-year contracts, a step aimed at reducing swings in demand. While the memory chip business is expected to be the main earnings engine, analysts said Samsung’s contract chip manufacturing operation is likely to remain loss-making.

Other major divisions are expected to face pressure. The company’s smartphone and flat-screen businesses are projected to see profit fall by about 50%, reflecting higher memory costs and intensifying competition. The overall picture leaves investors balancing a powerful memory-led upswing against uncertainties around pricing momentum, customer technology shifts, and potential disruptions tied to energy and supply chains.