SEOUL – Samsung Electronics is projected to report a staggering 13-fold increase in second-quarter profits, driven by soaring demand for artificial intelligence (AI) technology and a consequent rebound in memory chip prices.
The world’s largest manufacturer of memory chips, smartphones, and televisions is expected to announce an operating profit of 8.8 trillion won ($6.34 billion) for the quarter ending June 30. This estimate, based on an LSEG Smart Estimate from 27 analysts known for their accuracy, marks Samsung’s highest profit since Q3 2022. In comparison, the company recorded an operating profit of 670 billion won in the same period last year.
The tech giant’s semiconductor division is anticipated to report a second consecutive quarterly profit as memory chip prices continue to rise from the mid-2022 to end-2023 slump, which was triggered by weak post-pandemic demand for gadgets.
Analysts attribute this recovery to the explosive demand for high-end DRAM chips, such as high-bandwidth memory (HBM) chips used in AI chipsets, and chips used in data center servers and AI-driven devices. During the second quarter, memory chip prices increased by approximately 13% to 18% for DRAM chips and 15% to 20% for NAND Flash chips, as per data from TrendForce.
Samsung’s chip division is estimated to have achieved an operating profit of 4.6 trillion won, based on an average of forecasts from 10 analysts. This is a significant turnaround from the 4.36 trillion won loss reported for the same period last year.
Conversely, the mobile business likely experienced a decline in operating profit despite shipping a similar number of smartphones. Analysts attribute this to higher costs for parts, marketing, and development of AI services. The mobile division is expected to report an operating profit of around 2.2 trillion won, down from 3.04 trillion won a year ago.
Samsung is set to compete with rival Apple in the premium market segment with the launch of its latest flagship foldable phones and mobile accessories, including a new health-monitoring ring, on July 10 in Paris.
($1 = 1,387.4200 won)
