Broker forecasts put Samsung Electronics’ operating profit at 51–54 trillion won, far above recent consensus
Samsung Electronics’ 6th generation High-Bandwidth Memory (HBM4). (Photo provided by Samsung Electronics)
Samsung Electronics, which became the first domestic company to open the era of 20 trillion won (approximately $13.6 billion) in quarterly operating profit in the fourth quarter of last year, is now projected to set a new record in just one quarter. An analysis suggests that the company is poised to achieve its highest-ever performance in the first quarter of this year, with an operating profit in the 50 trillion won range, driven by an explosion in demand for memory semiconductors essential for Artificial Intelligence (AI) operations, coupled with the effects of a high exchange rate.
According to the financial investment industry on April 3, expectations for Samsung Electronics’ first-quarter performance are rising sharply among domestic and international securities firms. Meritz Securities and global investment bank (IB) Citi predicted an earnings surprise, forecasting Samsung’s Q1 operating profit at 54 trillion won and 51 trillion won, respectively. This figure represents a surge of over 150% compared to the 20.1 trillion won in the fourth quarter of last year, which was the company’s highest ever, and a staggering seven-fold jump compared to the 6.7 trillion won from the first quarter of last year.
However, the consensus for Samsung Electronics’ Q1 operating profit, as compiled by FnGuide based on the last month, stands at around 40.781 trillion won. As the forecasts from Meritz Securities and Citi exceed the market average by more than 25%, the possibility remains that the actual performance could be somewhat lower than their estimates, depending on the pace of the industry’s recovery.
The core driver of this explosive earnings growth is undoubtedly the surge in demand for AI inference memory and the consequent sharp rise in general-purpose memory prices. Furthermore, due to the semiconductor industry’s characteristic of having an overwhelmingly high export proportion, the recent trend of a weakening won (strengthening dollar) is assessed to have acted as a ‘double boon,’ maximizing won-denominated converted profits.
Meritz Securities estimated that while DRAM and NAND flash shipments in the first quarter remained at the previous quarter’s level, their Average Selling Prices (ASP) soared by 87% and 79%, respectively, compared to the previous quarter. The analysis suggests that Samsung Electronics’ superior pricing power, amplified by the expanding AI market, proved effective against Cloud Service Providers (CSPs) and Original Equipment Manufacturers (OEMs). Citi also projected that robust demand for AI inference memory would drive up the global DRAM ASP by as much as 190% this year compared to the previous year.
A detailed look at the performance by business division clearly shows the dominance of the semiconductor (Device Solutions, DS) division. The DS division’s operating profit for the first quarter is expected to be 48.1 trillion won according to Citi and 48.9 trillion won according to Meritz Securities, accounting for approximately 90% of the company’s total profit. Notably, Meritz Securities projected that the memory business alone within the DS division would generate a staggering 50.3 trillion won in profit.
In contrast, the non-memory and set businesses show mixed results. A painful point is the foundry business. Meritz Securities observed that the System LSI and foundry divisions are expected to post an operating loss of 1.4 trillion won due to yield stabilization issues, despite an increase in the utilization rate of advanced processes.
Regarding the Mobile eXperience (MX) division, which handles smartphones, Citi offered a conservative forecast of 2 trillion won in profit, citing sluggish IT demand. In contrast, Meritz Securities estimated a solid profit of 4 trillion won, buoyed by cost reductions and price increases for flagship models. In addition, the Display (SDC) and the TV/Home Appliances (VD/DA) divisions were predicted to earn profits in the range of 300 billion won and 200 billion to 500 billion won, respectively.
As the pace of industry improvement far exceeds previous market expectations, a valuation re-rating and a series of target price hikes from securities firms are continuing. This is driven by the expectation that the powerful effect of soaring memory prices will more strongly drive the company’s overall performance starting from the second quarter.
Citi raised its 2026 annual operating profit forecast by 24% from its previous estimate to the 310 trillion won range, lifting its target price from 280,000 won to 300,000 won. Meritz Securities also maintained its appropriate stock price at 250,000 won, forecasting an annual operating profit of 321.7 trillion won for this year. Recently, firms like Mirae Asset Securities and KB Securities have also added momentum to the company’s stock price by newly presenting target prices of 300,000 won and 320,000 won, respectively.
Kim Eun-jin
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