Author:137 Labs

On April 8, 2026, the South Korean stock market experienced a dramatic rebound. The KOSPI index closed up 6.87%, at 5872.34 points, rising 377.56 points in a single day, with an intraday high of 5919.60 points, triggering a circuit breaker for program trading at one point.

This violent rebound in risk assets was driven by a sharp decline in geopolitical risks (a temporary two-week ceasefire agreement reached between the US and Iran, securing safe passage through the Strait of Hormuz) and Samsung Electronics' extremely strong Q1 earnings guidance. The semiconductor sector became the absolute main line, with heavyweight stocks like Samsung Electronics and SK Hynix leading the rally, as the entire Korean stock market rebounded strongly from its slump in early April.

The Q1 performance guidance released by Samsung Electronics on the evening of April 7 ignited market sentiment: consolidated revenue was approximately 133 trillion won (+68.1% YoY), operating profit was about 57.2 trillion won (+755% YoY), and quarterly profit directly exceeded the total for the entire year of 2025 (43.6 trillion won), far exceeding market consensus (around 40–42 trillion won). This is not only the best single-quarter performance in Samsung's history but also the most direct annotation of the AI-driven memory (DRAM/NAND/HBM) super cycle.

However, before enjoying this wave of performance feast, we must first review the "invisible risks" that the market has been most concerned about over the past month — the impact on Samsung's chip supply chain from the Middle East conflict. The following breakdown is based on the latest authoritative media and research institution information (March-April 2026), systematically dissecting this impact.

Geopolitical Risk Review: The Influence of the Middle East Conflict on Samsung's Chip Supply Chain

1. When did it start to be affected?

Clear time node: February 28, 2026 (onset of the Iran conflict).

Reuters reported: "Since the war began on February 28, Samsung's stock price has fallen 14%."

Communication time between the South Korean government and businesses: early March 2026 (around March 5), the South Korean government had emergency discussions with Samsung and other enterprises about supply chain risks.

Conclusion: February 28 — the market and expectations were immediately impacted; early March — the supply chain risk entered the substantive assessment stage; mid to late March — began to transmit to manufacturing, PMI, and materials.

2. Core reasons for the impact (essentially three links)

1. Key materials: Helium supply shock [the most critical]. The Middle East (especially Qatar) is a major global helium source (accounting for approximately 30–38% of the world). Uses of helium: cooling lithography machines, maintaining vacuum environments, leakage detection (irreplaceable). Authoritative quote: "Helium is essential in semiconductor production, with no substitutes" "Attacks on Qatari facilities have led to helium supply damage." Mechanism: Middle East conflict → damage to Qatari gas fields/helium facilities → decline in helium supply → constraints on wafer fab cooling/manufacturing → chip production risk.
2. Energy costs (the chip industry is extremely energy-intensive). South Korea imports 70% of its crude oil from the Middle East, and chip factories (Fabs) are among the most energy-consuming industries globally. Impact path: War → rise in oil and gas prices → increase in electricity costs → surge in chip manufacturing costs → profit/capacity under pressure.
3. Logistics and supply chain (Strait of Hormuz). A global critical shipping route (energy + chemical transport). War has increased transportation risk or even shut down operations. Impact: delays in transporting industrial gases, chemicals, and equipment, and increased uncertainty in the supply chain.
4. Additional factors (demand side): AI data center investments might be delayed due to rising energy costs; the Middle East is also an important market for Samsung appliances/electronics.

3. How significant is the impact? (Judged in phases)

(1) Short term (current: Q1 2026)

Actual impact: very limited / no substantial shock to capacity yet.

Evidence: Samsung Q1 profits surged (driven by AI cycle); companies stated "inventory is sufficient / diversified supply chains"; industry judgment indicated "currently no significant production interruptions."

Key reason: Semiconductor companies generally have 3–6 months of critical materials in stock.

(2) Mid-term (3–6 months)

Entering the risk zone. Approximately 65% of helium used by South Korean enterprises relies on Qatar, with inventories around 6 months. If the conflict continues until Q3, production line efficiency may decline or localized production limits may occur.

(3) Long-term (6 months +)

Potential significant impact (structural risk): decline in chip production capacity, worsening cost structure, slowing expansion of the AI industry.

4. The key to the market right now

Currently, the market is characterized by "expected shocks > actual shocks."

Performance: Stock prices dropped by 14% at one point, yet profits hit a record high.

Explanation: The capital market is trading future risks; the physical industry is still supported by inventory + orders.

5. Summary of the degree of impact

The extent of the impact on Samsung's chip supply chain from the Middle East conflict can clearly be divided into three stages:

• Short-term (now, Q1 2026): Degree of impact low

Inventory buffer + strong demand from AI completely overshadowed the risks; currently, actual production has almost no interruption, and Samsung's Q1 profits achieved a year-on-year explosive growth of +755%.

• Mid-term (next 3–6 months): Degree of impact medium

Inventory of key materials like helium will gradually deplete, and if the conflict continues, production line efficiency may decline, or there may be risks of localized production limits.

• Long-term (more than 6 months): Degree of impact high

If risks are not alleviated, it may lead to a real decline in chip production capacity, significant deterioration of manufacturing costs, and further slow down the global AI industry expansion speed.

Currently, Samsung chips "have not been hit," but are already at the critical point of supply chain risks — the real impact depends on whether the war continues for more than 6 months. The ceasefire agreement on April 8 temporarily brought this risk to "zero," directly igniting the rebound in the Korean stock market.

1. Revenue and profit analysis: A perfect storm of rising quantity and price in AI memory

• Revenue: 133 trillion won, sequential growth of +41.7%, year-on-year growth of +68.1%. The first single quarter to surpass 130 trillion, mainly driven by explosive growth in the Device Solutions (DS, semiconductor) sector. Memory chip prices soared in Q1 (DRAM contract prices rose by +90–95% sequentially, NAND also significantly increased), combined with the strong demand from AI data centers driving the shipment volume, creating a double impact on both quantity and price.
• Operating profit: 57.2 trillion won, a year-on-year surge of 755%, with a significant increase in gross margin. The DS sector contributed over 42 trillion won in profit (nearly 75% of total profit), with the memory business being almost the sole contributor.

Core driver: High-bandwidth memory (HBM) + shortages in general DRAM/NAND. Although HBM currently accounts for a low percentage, it is growing the fastest and is the most certain growth point for the future.

2. Above or below expectations?

Significantly exceeded expectations. Market consensus for Q1 operating profit was about 40–42 trillion won, while Samsung's actual guidance was 57.2 trillion, delivering a "super surprise" of over 30%. This wave of "super expectations" is fundamentally due to the demand for AI computing power being far greater than initial estimates, leading to memory prices and shipments both exceeding expectations — a structural (AI-specific memory) + cyclical (general memory shortage) resonance.

3. Business capability breakdown: Financial report logic + how to calculate business value

The core logic of Samsung's financial report is "the DS sector (semiconductors) reign supreme, while other businesses support." Almost all excess profits in Q1 came from DS:

• Memory business (DRAM + NAND + HBM): rising both in quantity (bit growth) + price (ASP). DRAM ASP increased by about 55% sequentially, NAND by 53%, with gross margins reaching 67% and 52% respectively. Calculation method: shipment volume growth × price increase × fixed cost dilution → explosive gross profit.
• HBM competition: SK Hynix still leads, but Samsung HBM3E has passed verification, and HBM4 production is accelerating, with market share expected to rise to 28–30% in 2026. Samsung’s advantage lies in vertical integration and production capacity.
• Other businesses providing support: Mobile and display panels offer a buffer during downward cycles, but currently contribute little.

Financial report logic: The market is highly concerned about "sustainability of memory prices." Analyst models typically assume: Q1/Q2 prices remain high → Q3/Q4 capacity expansion risks. If actual execution is slightly below expectations, it could trigger "negative signals" — this is the typical feature of cyclical stocks where "expectations are particularly high and the margin for error is extremely low."

4. Valuation: PE/PS what? Is it reasonable in the current market?

Current valuation (as of around April 9, 2026):

Trailing P/E (price-to-earnings ratio over the past 12 months): approximately 29–38x (high volatility, historically neutral value of 12–15x). Forward P/E (projected earnings ratio for the entire year of 2026): extremely low, only 6.7–7.5x (optimistic models even at 3.8x), reflecting strong market confidence in significant profit growth for the entire year of 2026.

P/S (price-to-sales ratio, market value/revenue): approximately 3.7–3.9x (TTM), corresponding to a "3–4 year payback period."

Bull market rationality judgment: In the "bull market phase" of the AI memory super cycle, this valuation is reasonable and even slightly low. Historical high points for P/S have reached 4x+, forward P/E is often below 10x. However, once entering a downward cycle, PE may rapidly expand. Currently, the low forward P/E indicates that the market has partly priced in high growth for 2026 but has not yet overdrawn for 2027-2028 — provided that AI demand continues to exceed expectations.

5. Future growth and financial risks: Is there still a sufficiently large market?

Positive: AI computing power demand is a "sufficiently large foreseeable market." Global demand for HBM/DRAM in data centers is expected to grow at a compound annual growth rate of over 30–40% from 2026 to 2030, with Samsung + Hynix combined market share exceeding 70%, and a clear growth path (HBM4/HBM5 iterations + AI PC/edge computing).

Risk points (pointing to limited growth):

• Cyclical ceiling: The classic "supply and demand imbalance → capacity expansion → oversupply → price collapse" pattern in the storage industry. After the capacity release in the second half of 2026, prices are likely to fall. If execution is slightly slow, guidance for Q3/Q4 below high expectations will bring negative signals.
• Geopolitical supply chain risks: The Middle East conflict has temporarily eased due to the ceasefire, but inventories of key materials like helium are only around 6 months. If further turmoil arises in the future, it could still restrain growth.
• Possible overdraw of future orders: HBM orders are mostly long-term contracts (some locked in until the end of 2026), but Samsung is still expanding production, with no obvious front-loading risks yet.
• Support plans: Yes — diversified businesses (mobile, panels, foundry) + ample cash reserves, high dividend rate (expected dividend yield of about 5% in 2026). Samsung has initiated a helium recovery system (HeRS) and diversified sourcing through agreements with Linde/Air Products.
• Overall financial risk: The balance sheet is healthy, with no significant leverage. However, if memory prices collapse in 2027 and geopolitical issues arise again, profits may be halved, leading to a valuation reset. The market is currently pricing in "bull market valuations," with actually little room for error.

Conclusion: Samsung's Q1 earnings are a concrete realization of AI dividends, and the sharp increase in the Korean stock market on April 8 is a collective confirmation of the super cycle + easing of geopolitical risks. However, "expectations are already extremely high" + the cyclical nature + supply chain attributes mean that any subsequent execution falling short of expectations or new risk signals could lead to a pullback. Investors should closely monitor Q2 guidance, HBM market share progress, global AI capital expenditures, and the implementation of the ceasefire in the Middle East.

In the long term, the two semiconductor giants in South Korea still stand in the most advantageous position amidst the AI wave, but the cyclical attribute dictates that "making quick money is easy, holding positions is difficult."

Disclaimer: This article is for informational reference only and does not constitute any investment advice. The cryptocurrency market is highly volatile, investment carries risks, please conduct your own research and independently assume the consequences.