Samsung Electronics has reported a Q1 2026 profit that more than triples last year’s figures, propelled by a surge in demand for high‑bandwidth memory chips and advanced processors powering AI data centres. The South Korean giant posted operating profit of 15.8 trillion won (US$11.8 billion), up 220 per cent year‑on‑year, beating analyst estimates by 12 per cent. Revenue climbed 28 per cent to 92 trillion won, with the semiconductor division posting its strongest quarter since 2022.
TSMC, the world’s largest contract chipmaker, also surpassed expectations. Q1 revenue hit NT$1.02 trillion (US$31.5 billion), up 36 per cent and 8 per cent above consensus forecasts. The Taiwan‑based foundry credited relentless demand for its 3nm and 5nm nodes, which power Nvidia’s Blackwell GPUs and Apple’s latest chips. High‑bandwidth memory (HBM) production ramped to 80 per cent utilisation, with HBM3e sales doubling quarter‑on‑quarter.
The results underscore Asia’s dominance in the global AI hardware race. Samsung’s memory division alone contributed 70 per cent of operating profit, reversing two years of losses from oversupply and weak consumer electronics demand. HBM chips for AI training now fetch premiums three times higher than standard DRAM. TSMC’s advanced nodes account for 52 per cent of revenue, up from 38 per cent a year ago, as hyperscalers like Microsoft and Amazon double orders.
Capacity expansion is accelerating. Samsung broke ground on its fourth Texas fab, while TSMC plans three new Arizona plants with US CHIPS Act subsidies. Both are diversifying away from Taiwan and Korea amid geopolitical risks, but Asia remains the manufacturing core.
Challenges persist. US export controls on advanced chips to China cost Samsung US$2 billion in forgone sales. Power shortages in Taiwan delayed TSMC’s April ramp. Intel’s foundry push and GlobalFoundries’ specialty expansion add competition.
Analysts remain bullish. Nomura raises Samsung target to 120,000 won, citing 79 per cent Korea EPS growth. TSMC sees 36 per cent Taiwan EPS surge. Morgan Stanley calls Asia chips “the decade’s best secular story” despite valuations at 25 times forward earnings.
Global AI spending forecasts justify the optimism. Gartner projects US$200 billion in 2026 hardware spend, 40 per cent above 2025. Hyperscalers plan 50 per cent data‑centre capacity growth. Asia’s 70 per cent foundry market share and 85 per cent advanced memory production position Samsung and TSMC as indispensable. For investors, the earnings validate rotating into Asia tech despite recent volatility from oil shocks and US policy uncertainty. Smaller chip equipment and testing names could ride the coattails as capacity expansions accelerate. The question is whether supply chains can scale fast enough to meet exploding AI demand without triggering the next boom‑bust cycle.
