- Samsung Electronics has reported a significant surge in profits, buoyed by the increasing demand for artificial intelligence and a rise in chip prices.
- The company’s optimistic outlook on AI’s role in driving future growth has been reaffirmed by these financial results.
OUR TAKE
Samsung’s positive stance on AI demand is reinforced by the expanding use of AI across sectors like healthcare, automotive, and electronics. The firm is intensifying its innovation in AI to address market demands and leverage the expanding opportunity. Leveraging its technical acumen and cutting-edge offerings, Samsung is strategically placed to exploit the escalating demand for AI solutions, sustaining its triumphant trajectory in the international arena.
–Rebecca Xu, BTW reporter
What happened
Samsung Electronics announced that its operating profit for April to June soared to 10.4 trillion won ($7.52 billion), a significant increase from the 670 billion won recorded in the same period last year. This profit marked the company’s highest since Q3 2022, driven by the semiconductor division’s resurgence as Samsung’s primary revenue generator. The semiconductor division reported a 6.45 trillion won profit, its highest since Q2 2022, and its second consecutive quarterly profit.
The company anticipates robust demand for chips propelled by artificial intelligence in the latter half of the year, coinciding with a reported over 15-fold increase in its Q2 operating profit. The primary drivers behind this success are the growing demand for AI applications across various industries and the upward trend in chip prices, a key component in AI technology.
“For the remainder of 2024, we anticipate AI servers will command a greater market share in the (memory) sector, as key cloud service providers and businesses increase their AI investment,” stated Samsung.
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Why it’s important
Samsung’s soaring profits, fuelled by AI demand and higher chip prices, underscore the company’s resilience and adaptability in a rapidly evolving tech landscape. As the AI market continues to expand, Samsung is well-positioned to capitalise on new opportunities and drive innovation.
The market has responded positively to Samsung’s earnings report, with investors showing confidence in the company’s ability to capitalise on the burgeoning AI market.
Samsung’s bullish stance on AI demand indicates a promising future for the company, as it continues to invest in research and development to maintain its competitive edge in the semiconductor industry.
In summary, Samsung’s robust chip market performance coupled with a positive view on AI demand signals promising growth prospects for the company.
