Samsung Electronics has announced a significant surge in profits for the first quarter of 2024, expecting a remarkable tenfold increase compared to the same period last year.
This surge is attributed to the recovery of chip prices following a post-pandemic slump and the escalating demand for artificial intelligence (AI)-related products.
As the world’s leading manufacturer of memory chips, smartphones, and televisions, South Korea-based Samsung Electronics is releasing its detailed financial report on April 30.
The technology giant estimates its operating profit to have soared to 6.6 trillion won ($4.9bn; £3.9bn) in the January-March quarter, marking a staggering 931% surge from the corresponding period in 2023. This surpassed analysts’ expectations, which hovered around 5.7 trillion won.
The rebound in semiconductor prices on the global market has been a significant factor contributing to Samsung’s enhanced earnings, with global memory chip prices surging by approximately a fifth over the past year.
Notably, Samsung’s semiconductor division is typically the primary revenue generator for the company.
Anticipated strong demand for semiconductors throughout the year, fueled by the burgeoning AI sector, is expected to further bolster Samsung’s performance.
Additionally, the recent earthquake in Taiwan on April 3 is anticipated to tighten the global chip supply, potentially enabling Samsung to escalate prices.
Taiwan, home to major chipmakers such as TSMC, a key supplier to Apple and Nvidia, experienced some disruption in operations despite TSMC’s affirmation of minimal impact on production.
Samsung is also poised to benefit from the sales of its latest flagship Galaxy S24 smartphone, launched in January, further contributing to its anticipated robust performance in the coming quarters.
