Samsung hits $1 trillion valuation on AI chip demand

Samsung Electronics, the world's largest memory chip maker, reached a $1 trillion valuation on Wednesday as the company posted record profits driven by surging demand for chips that power artificial intelligence systems. The South Korean tech giant reported its semiconductor division generated sales of 81.7 trillion won ($58 billion) and an operating profit of 53.7 trillion won in the first quarter of 2026, marking the first time the division exceeded 50 trillion won in quarterly operating profit and representing a 756 percent increase from the same period last year. The exceptional performance positioned Samsung as the second-best performing semiconductor company globally, trailing only Nvidia, which reported an operating profit of 66 trillion won during the same period. Samsung's semiconductor division alone accounted for 93.8 percent of the company's total operating profit, underscoring the critical importance of memory chips to the conglomerate's bottom line. The company attributed the growth to its successful development of HBM4 memory modules, which are used in AI platforms, securing supply deals with major chip designers including Nvidia and AMD. However, despite the financial windfall, Samsung remains significantly behind Taiwan Semiconductor Manufacturing Company in contract chip manufacturing, holding only 7 percent of the market compared to TSMC's 70 percent share. Looking ahead, Samsung is aggressively expanding its manufacturing capabilities to reduce its gap with TSMC and diversify beyond memory chips, including partnerships with US companies to develop production facilities outside of Asia. The company is also reportedly seeking contracts to manufacture chips for Nvidia and Apple on American soil. Meanwhile, Samsung's other business segments told a different story, with mobile and networks reporting operating profit of just 2.8 trillion won, while display and home appliance divisions experienced declines due to rising memory costs.