mage Credits: JUNG YEON-JE/AFP
Samsung Profits Surge Due to Rising Chip Prices and Strong AI Demand
To 10.4 trillion won ($7.54 billion), Samsung’s operating profit grew by more than 15 times in the second quarter. This was due to rising chip prices and strong demand for AI technologies.
Samsung Electronics’ overall profit for the second quarter went up a lot, the company said on Friday. The company said that the rise in demand for semiconductors was due to the growth in artificial intelligence.
Based on estimates, the company’s operating profit for the quarter ending June 30 increased by over 15 times, hitting 10.4 trillion won ($7.54 billion) from 670 billion won the previous year.
The 8.8 trillion won consensus estimate from LSEG SmartEstimate, which is a weighted average of the most reliable experts’ predictions, was much lower than that. Samsung said that business probably made about 23% more than the same time last year, or 74 trillion won, during the quarter. Since the third quarter of 2022, this was the most successful quarter for the company.
Its crown jewel and biggest contributor to total success, the semiconductor business, probably made a profit for the second quarter in a row. That would be better than the first quarter, and experts think that memory chip prices will continue to rise after falling from the middle of 2022 to the second half of 2023. This drop was caused by a drop in demand for gadgets that use these chips after the pandemic.
Rising Demand for High-End Chips
The prices of chips have been going up because more people want high-end DRAM chips, especially high-bandwidth memory (HCM) chips that are used in artificial intelligence (AI) chipsets and chips that are used in data centre computers and AI-powered gadgets.
TrendForce says that the prices of DRAM chips have gone up 13–18% since the last quarter compared to the second quarter. In the second quarter, the prices of NAND Flash chips, which are used to store data, went up by 15 to 20 percent. Due to the high demand for artificial intelligence technologies. This puts Samsung in a good situation in the global semiconductor market.
