Trends
AI frenzy boosts Samsung Q2 profit 13-fold
Samsung Electronics has reported a 13-fold increase in its second-quarter profit, fueled by robust demand for AI technology and the rebound in memory chip prices.
Headline
Samsung Electronics has reported a 13-fold increase in its second-quarter profit, fueled by robust demand for AI technology and the rebound in memory chip prices.
Context
OUR TAKE Despite overall profit growth, Samsung’s mobile business has experienced a decline. The division’s operating profit for the second quarter is expected to be $1.6 billion, down from $2.2 billion in the same period last year. This decrease is attributed to increased costs in components and marketing, as well as investments in AI service development. –Vicky Wu, BTW Reporter Samsung Electronics , the world’s largest manufacturer of memory chips, smartphones, and TVs, anticipates a staggering 13-fold surge in second-quarter profit compared to last year. Estimated operating earnings for Q2 2024 are set to soar to 8.8 trillion won ($6.34 billion). This marks Samsung’s highest profit since Q3 2022, highlighting a significant turnaround in performance.
Evidence
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Analysis
The remarkable profit surge is primarily driven by the resurgence of Samsung’s semiconductor division. In Q2 2024, this segment is projected to achieve an operating profit of $3.3 billion, a notable recovery from a loss of $3.2 billion in the same period last year. The increased demand for advanced DRAM chips, especially in AI applications, has been instrumental in this growth. Prices for DRAM chips have jumped between 13% to 18%, while NAND Flash chips for data storage have seen increases of 15% to 20%, as per data provider TrendForce. Also read: Samsung Galaxy Z Flip 6 and Z Fold 6 product pages are leaked Also read: Samsung unveils SmartThings Pro for businesses The thriving AI industry has markedly boosted Samsung’s profitability, spurred by a heightened demand for advanced memory solutions, notably high-bandwidth memory (HBM), critical for AI data centres. This trend has catalysed an increase in both prices and demand for Samsung’s premium DRAM chips, indispensable components for AI chipsets and data centre infrastructure. Improved performance from Samsung’s semiconductor unit could herald the second consecutive quarter of profit gains.
Key Points
- Samsung Electronics has reported a 13-fold increase in its second-quarter profit, fueled by robust demand for AI technology and the rebound in memory chip prices.
- The company’s semiconductor division in Q2 2024 is projected to achieve an operating profit of $3.3 billion, a notable recovery from a loss of $3.2 billion in the same period last year.
Actions
Pending intelligence enrichment.
