AI revolution expected to boost Samsung Q2 profit 13 times by Reuters
Written by Joyce Lee
SEOUL (Reuters) – Samsung Electronics ( KS: ) is expected to post a 13-fold jump in second-quarter profit from a year ago as demand for artificial intelligence technology fuels a rise in memory chip prices.
Operating profit for the world’s largest maker of memory chips, smartphones and TVs likely rose to 8.8 trillion ($6.34 billion) in the quarter ended June 30, according to an LSEG SmartEstimate estimate of 27 analysts, on a conservative scale. accurate.
That amount would be Samsung’s highest profit since the third quarter of 2022. It compares to an operating profit of 670 billion won in the second quarter of last year.
Performance in the tech giant’s key semiconductor division likely continued to post a second straight quarterly profit, as memory chip prices continued to rise from mid-2022 to late 2023 due to weak post-pandemic demand for chip-based gadgets. .
Explosive demand for high-end DRAM chips such as high bandwidth memory (HBM) chips used in AI chipsets, as well as chips used in data center servers and gadgets that use AI services are supporting a broad recovery in the chip industry, say analysts.
During the second quarter, memory chip prices jumped about 13% to 18% compared to the previous quarter for DRAM chips used in technology devices and 15% to 20% for NAND Flash chips used for storage. of data, according to data provider TrendForce.
Estimated Q2 operating profit in Samsung’s chip division came in at 4.6 trillion won, according to an average of 10 analysts’ forecasts. This compares to a loss of 4.36 billion won during the same period last year.
Its mobile business is likely to see its Q2 operating profit shrink compared to a year ago despite shipping the same number of smartphones, analysts said, due to higher component costs and higher costs for marketing and development of AI services.
The mobile phone business is likely to report an operating profit of about 2.2 trillion won, according to an average of forecasts from 10 analysts, down from 3.04 trillion won last year.
Samsung is expected to compete with rival Apple (NASDAQ: ) at the top end of the market when it unveils its latest foldable phones and mobile accessories, including a new health monitoring ring, on July 10 in Paris.
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