- Samsung’s strategic focus on AI is boosting sales momentum, with strong demand expected for AI technologies in the second half of 2024.
- The company’s chip division, historically vital to its profitability, has rebounded significantly, transitioning from losses to substantial profits driven by increased demand for AI-related products.
- Samsung’s commitment to AI is evident in its mass production of high-bandwidth memory (HBM) chips tailored for generative AI chipsets, aligning with industry trends and competitive strategies.
Samsung believes that AI technologies are driving a surge in the sale of its products, especially its chip division, which accounts for two-thirds of the company’s operating profit.
AI fuels the momentum behind Samsung product sales
Samsung expects demand for artificial intelligence to hold strong in the second half, promoting sales of memory chips and tech devices, according to Samsung Electronics on Tuesday.
“In the second half of 2024, business conditions are expected to remain positive with demand – mainly around generative AI – holding strong, despite continued volatility relating to macroeconomic trends and geopolitical issues,” Samsung said in a statement.
Samsung’s memory chip sales nearly doubled in the first quarter compared to the previous year, driven by a significant increase in prices following a severe downturn, attributed to the AI boom.
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Chip division is historically Samsung’s cash cow business
Samsung’s chip division, which constitutes two-thirds of its operating profit, rebounded significantly, swinging from a 4.58 trillion won loss in the previous year to a profit of 1.91 trillion won in the March quarter.
The memory chip business reported its first profit since the third quarter of 2022. This turnaround stemmed from customers anticipating further price increases, prompting increased chip purchases.
Samsung commenced mass production of its latest high-bandwidth memory (HBM) chips, the 8-layer HBM3E, this month. These chips are tailored for generative AI chipsets, aligning with the industry trend that has boosted Samsung’s competitors.
The company’s mobile devices business achieved an operating profit of 3.51 trillion won in the first quarter, albeit a decrease from 3.94 trillion won in the previous year. This decline was attributed to rising costs, including heightened memory chip prices, affecting margins notably from the launch of its flagship Galaxy S24 smartphones during the quarter.
