Samsung Electronics Co., Ltd.

Record profitability in 1Q26 (good) + strong AI-driven demand (surprising momentum): Samsung reported KRW 134T revenue (+43% Q/Q) and KRW 57T operating profit (up +185% Q/Q) for its highest-ever quarterly performance, with operating margin expanding from 21% to 43%. Net profit KRW 47T (2.4x Q/Q). CFO cited AI technology innovations + high value-added mix as key drivers; currency (notably USD appreciation) added about KRW 1.8T to operating profit Q/Q.

DS outlook: memory upcycle expected to continue; capacity remains the constraint (good + challenge): - Q2 expectation (CFO): semiconductor demand remains strong despite geopolitical noise; memory price expected to stay on the current upward trend driven by AI infrastructure build-out. - Memory growth strategy: continue increasing HBM4, DDR5 high-density, and eSSD shipments to expand profitability; in Q2 they will provide first samples of HBM4E. - Investor-relevant metrics (Memory business call): 1Q results showed very tight supply vs demand. Demand fulfillment rate at a record low; customers are bringing forward 2027 demand already—implying the supply-demand gap could widen further into 2027. For Q2 guidance: DRAM bits expected to grow single-digit % Q/Q, while NAND bit growth expected low single-digit % Q/Q due to constrained available capacity/inventory.

Q2 company-wide outlook: mixed picture—semis improving, DX profitability pressured (mixed + negative points): - Semiconductors: CFO expects improving earnings (AI-supported demand) across DS, with HBM/AI products remaining central; Foundry expects advanced nodes to reach full utilization. - DX (Mobile experience) negative: CFO and MX commentary both flagged rising cost pressures; DX division profit expected to decline in Q2. MX said memory costs rose in 1Q and are expected to rise further in 2Q, making profitability difficult despite maintaining flagship-centric sales. - Display: cautious on uncertain market; focus on premium profitability and stable supply to key customers.