Samsung Electronics' semiconductor plant in Pyeongtaek, Gyeonggi Province / Courtesy of Samsung Electronics

Samsung Electronics will increase the supply of high bandwidth memory (HBM) semiconductors, known simply as AI memory chips, by more than three times this year compared to 2023 to respond to soaring demand for generative AI services, the company said, Tuesday.

To that end, Samsung began producing the fifth-generation HBM chip called HBM3E, which stacks eight DRAM memory chips on top of each other, beginning this month and plans to mass-produce a 12-layer HBM3E within the second quarter.

The announcement comes as the company logged an operating profit of 6.61 trillion won ($4.78 billion) in the first quarter, up 931.87 percent from the same period of 2023, driven by its semiconductor and smartphone businesses. Samsung achieved sales of 71.92 trillion won, up 12.82 percent year-on-year.

"This year's HBM supply volume will continue to increase more than three times compared to last year, and the volume has already been discussed and agreed upon with clients," Kim Jae-june, executive vice president of Samsung's memory business, told investors during a first quarter earnings call. "Next year, we plan to supply at least twice as much as this year."

The tech giant attributed the rises in sales and operating profit to increased prices of memory chips and strong sales of its flagship smartphone Galaxy S24 series.

Specifically, Samsung's Device Solutions division, responsible for the memory chip business, achieved an operating profit of 1.91 trillion won, becoming profitable for the first time in five quarters. The chip division suffered operating losses during all four quarters of 2023 after logging an operating profit of 270 billion won in the fourth quarter of 2022.

The Device eXperience (DX) division, dealing with smartphones and home appliances, reported an operating profit of 4.07 trillion won. Samsung highlighted that the Galaxy AI feature installed in the Galaxy S24 series was well-received by customers.

Samsung's home appliance business enjoyed strong demand as it focused on selling high-priced products, such as 75-inch or larger TVs, premium air conditioners and Bespoke AI home appliances.

On the other hand, Samsung Display saw operating profit fall 56.4 percent year-on-year to 340 billion won, due to intensified sales competition.

Samsung said it expects favorable business conditions to continue in the second quarter.

Sales of memory chips for servers and storage are expected to improve due to continued demand from generative AI, while chip prices are anticipated to rise.

"Recently, as generative AI models continue to evolve, there has been a surge in requests for SSD supply," Kim said. "The shipment volume of SSDs for servers this year is expected to increase by 80 percent compared to last year."

The smartphone division aims to enhance the AI user experience for its upcoming foldable devices, set to launch in the second half of this year. Additionally, in the wearable device category, Samsung has confirmed its preparations to introduce the Galaxy Ring smart gadget during the same period.

Regarding its foundry business, which manufactures chips for chip-design companies, Samsung announced that the Taylor plant in the U.S. state of Texas, currently under construction, is expected to commence mass production in 2026.