Tech giant Samsung Electronics estimated on Tuesday that its first quarter profit had soared 755 percent annually to a record high of 57.2 trillion won ($37.9 billion), driven by strong sales of chips crucial for artificial intelligence.
The South Korean government has pledged to become one of the world's top three AI powers, alongside the United States and China.
Samsung has emerged as a key player -- along with fellow South Korean firm SK hynix -- in the supply of high-performing chips in demand from companies racing to keep up with the fast-evolving AI industry.
The company also said in a regulatory filing that its sales were expected to reach 133 trillion won ($88 billion) in the three months to the end of March, a 68 percent increase compared to the same period last year.
The strong outlook comes despite the risk posed to the global semiconductor supply chain if the war in the Middle East drags on.
A South Korean ruling party lawmaker told reporters last month that officials from Samsung and other companies had raised concern about potential disruption to chip production if some key supply chain materials, such as helium, cannot be sourced from the Middle East.
"Samsung Electronics achieved its highest-ever results, driven by rising revenue and profits in its memory-focused Device Solutions (DS) division," a Samsung spokesperson said.
He said the firm's competitiveness in home appliances and smartphones has helped to boost earnings.
The operating profit -- more than an eight-fold increase from 6.69 trillion won a year earlier -- was 36.7 percent higher than the average estimate, South Korea's Yonhap news agency reported, citing its own data firm.
- Growing demand -
With growing demand for memory chips, Samsung is expected to see "even better figures" in the months ahead, analyst Ryu Hyung-keun of Daishin Securities told AFP.
"As we are seeing a surge in memory chip prices, its profit margins will improve further for the remainder of the year," he said.
But the company is facing risks, said Kim Dae-jong, a business professor at Sejong University.
"A labor union strike scheduled for next month and the war in Iran are weighing on the outlook," he told AFP.
"The Middle East is Samsung's key market for home appliances, and demand from the region is significant, making it a source of concern."
Meanwhile, LG Electronics, South Korea's second-largest appliance maker after Samsung, also projected record first-quarter revenue of 23.73 trillion won.
"Despite continued macroeconomic uncertainty, the company's core businesses, including home appliances, maintained growth based on strong product competitiveness and solid market positions," the company said in a statement.
- Pushing up prices -
Samsung has seen strong orders from major technology firms for high-bandwidth memory -- a type of chip that is used in data centers and AI "accelerators", which are useful in carrying out demanding tasks and computation.
That is also pushing up the cost of less flashy chips used in consumer electronics -- threatening higher prices for phones, laptops and other devices worldwide.
Riding the AI boom, Samsung's shares have risen more than 240 percent over the past year.
Samsung did not provide earnings breakdowns from its separate divisions, such as the chip and mobile divisions.
Taipei-based research firm TrendForce predicts that memory chip industry revenue will surge to a global peak of more than $840 billion in 2027.
Samsung has already earmarked billions of dollars to expand chip production facilities, pledging to continue spending in "transitioning to advanced manufacturing processes and upgrading existing production lines to meet rising demand".
Experts have said the move would help Samsung seize the moment in the intensifying race for chips critical to AI infrastructure.
Samsung is expected to disclose its final quarterly earnings report at the end of April.
The firm's shares were up 0.73 percent in the afternoon trade in Seoul.
