Image: Samsung
Samsung forecast a surge in its second-quarter profit as the global memory chip market continues its rebound fueled by the AI boom.
The South Korean tech giant said on Friday in its preliminary earnings guidance that it estimates an operating income of 10.4 trillion won in the quarter, an increase of 1,452% from a year ago. Revenue also jumped 23.31% over the same period to 74 trillion won.
Also: The Samsung Galaxy Tab S9 FE is only $379 for Amazon’s 4th of July sale, its lowest price yet
The profit surge continues the turnaround of Samsung’s chip division that started the previous quarter, in which it saw operating income jump 900% from a year ago. The chip division’s return to profitability after five previous quarters in the red directly contributed to that jump.
In the second quarter, the company’s chip division is expected to have done the heavy lifting, contributing approximately half or more of the operating income, according to South Korean analysts.
Also: What to expect from Samsung Unpacked Summer 2024: Galaxy Z Fold 6, Watch 7, Smart Ring, more
DRAM and NAND prices have been on a steady climb since late last year. DRAMs, especially high-bandwidth memory (HBM), used in data centers are especially in high demand thanks to AI.
Meanwhile, Samsung’s smartphone business unit is expected to have contributed approximately 2 trillion won out of the operating income total. The company will announce its full earnings report at the end of the month.
The strong second quarter performance, its best in two years, will no doubt raise morale in Samsung after a dismal 2023. And it is only going to get better.
Demand for HBM is expected to be strong through the year and the company has a deal with Nvidia on the horizon. Samsung has said it is planning to start mass production of HBM3E within the third quarter. In addition to this continuing rise in chip demand, Samsung is also set to unveil its new foldables next week, which will give its earnings a further boost.
