Korean giant Samsung Electronics reported a 933 percent rise in first-quarter operating profit as the bullishness around Artificial Intelligence drove its memory chip prices.
Samsung reported revenue of 71.92 trillion Korean won (appx $52.3 billion) against an estimated revenue of KRW 71.04 trillion ($51.52 billion) by LSEG. Operating profit was up KRW 6.61 trillion (appx $4.79 billion), against estimated KRW 5.94 trillion.
That was a jump of 12.81 percent in revenues from a year ago, and 932.8 per cent in operating profit.
Samsung biggest profit-making division, swung to profit of KRW 1.91 trillion in the March quarter
In the fourth quarter of 2023, Samsung posted a 34.57 percent drop in operating profit, down 3.8 percent, and operating profit was KRW 2.82 trillion, down 34.57 percent.
Its semiconductor business fell into a record loss of KRW 14.88 trillion for the full year 2023 on the back of weak global demand.
The chip division, Samsung’s biggest profit-making division, swung to profit of KRW 1.91 trillion in the March quarter compared to a 4.58 trillion won loss a year earlier. It was the first time that the division reported a profit since the third quarter of 2022.
Samsung is the world’s largest manufacturer of dynamic random-access memory chips (DRAM), which are commonly found in consumer devices, including smartphones and computers.
In a statement, Samsung said: “The company posted KRW 71.92 trillion in consolidated revenue on the back of strong sales of flagship Galaxy S24 smartphones and higher prices for memory semiconductors. Operating profit increased to KRW 6.61 trillion as the Memory Business returned to profit by addressing demand for high value-added products.”
Despite macroeconomic uncertainty and geopolitical tensions, Samsung said it expects the second quarter to be driven mostly by ‘positive demand’ for generative AI, while mobile demand will remain stable.
In an earnings call, Samsung said: “Profitability in Q2 is expected to be down slightly compared to Q1 and Q3, which is when we released new flagship products this year. In response, we’re focusing on cost competitiveness throughout the R&D, manufacturing and sales processes to achieve solid profitability.”
To meet AI demand, Samsung started mass producing HBM3E 8H and V9 NAND in April. It plans to mass produce HBM3E 12H products and a 128GB product based on 1b nanometer 32GB DDR5 within the second quarter.
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