Trends
Samsung forecasts AI-driven chip demand surge
OUR TAKESamsung Electronics projects a strong demand for AI-driven chips in the latter half of 2024, bolstered by a significant recovery in semiconductor prices. This optimistic outlook, coupled with a 15-fold surge in second-quarter operating profit, underscores the chip division’s fulcrum role in …
Headline
OUR TAKESamsung Electronics projects a strong demand for AI-driven chips in the latter half of 2024, bolstered by a significant recovery in semiconductor prices. This optimistic outlook, coupled with a 15-fold surge in second-quarter operating profit, underscores the chip…
Context
OUR TAKE Samsung Electronics projects a strong demand for AI-driven chips in the latter half of 2024, bolstered by a significant recovery in semiconductor prices. This optimistic outlook, coupled with a 15-fold surge in second-quarter operating profit, underscores the chip division’s fulcrum role in driving the company’s financial rebound from last year’s low base. -Vivienne Xie, BTW reporter Samsung Electronics has projected robust demand for chips driven by artificial intelligence (AI) in the latter half of this year, as it reported a significant surge in its second-quarter operating profit. The AI boom aggravated a rebound in semiconductor prices, causing earnings to rise more than 15-fold from the previous year’s low base
Evidence
Pending intelligence enrichment.
Analysis
“In the second half of 2024, AI servers are expected to dominate a larger share of the memory market as major cloud service providers and enterprises ramp up their AI investments,” Samsung said. A 0.7% rise in Samsung’s share price during morning trade reflected this optimism, compared to a 0.3% rise in the benchmark index. Samsung’s operating profit soared to $7.56 billion from $4.87 billion a year earlier, marking its highest operating profit since the third quarter of 2022. A strong performance in its chip division facilitated to the revival, which has reclaimed its status as the company’s primary revenue generator after a slump due to weak post-pandemic demand for consumer electronics. Also read: Nvidia approves Samsung’s HBM3 for China market GPUs Also read: EU eyes Google-Samsung AI deal for antitrust issues The chip division posted a profit of $4.69 billion, its highest since Q2 2022, marking its second consecutive quarterly profit. The surge in demand for high-end DRAM chips, such as high bandwidth memory (HBM) chips used in AI applications, data centre servers, and AI-driven gadgets, contributed to rising chip prices. Samsung noted that its HBM revenue increased by approximately 50% from the previous quarter.
Key Points
- In the second half of this year, Samsung Electronics anticipates a considerable marketplace for artificial intelligence-driven chips.
- Samsung’s chip division posted its highest profit since Q2 2022, fuelled by increased demand for high-end DRAM chips used in AI applications.
Actions
Pending intelligence enrichment.
