At the Mobile World Congress in Barcelona on February 28, 2024, the Samsung logo prominently marked their pavilion. Samsung Electronics surprised analysts on Wednesday by reporting higher-than-anticipated second-quarter figures, driven by unwavering demand for its advanced memory chips crucial for AI training. The reported revenue was 74.07 trillion Korean won ($53.45 billion), surpassing the expected 73.74 trillion won, while operating profit hit 10.44 trillion won, exceeding the forecasted 9.53 trillion won.
Samsung’s Q2 revenue saw a 23.42% year-on-year increase, with operating profit soaring by an impressive 1,458.2%. The surge was attributed to strong demand for both high-bandwidth and conventional memory from clients investing in AI. Looking ahead, Samsung anticipates continued robust demand in the server AI segment, particularly for HBM, DDR5, and SSD products. The company also noted that expanding capacity for HBM and server DRAM might restrict the supply of conventional memory chips.
Analysts predict a positive outlook for Samsung, with memory chip prices expected to rise, driving sequential profit growth through 2025. This forecast aligns with a broader AI semiconductor roadmap recently announced by Nvidia and global chip makers. The AI boom has notably benefited top memory chipmakers like Samsung and SK Hynix.
Last year, Samsung’s business rebounded as the memory chip prices recovered, following significant losses in 2023 due to a post-COVID demand slump. Samsung has reportedly passed tests for using its HBM3 chips with Nvidia processors targeted at the Chinese market, indicating a favorable position in the competitive landscape.
In a significant upward trajectory, SK Hynix reported its highest quarterly profit since 2018, recovering from substantial losses the previous year. Analysts expect Samsung’s operational performance to improve in the second half, bolstered by memory chip demand and a trend towards premium smartphones. Samsung also announced the global availability of its latest AI-driven Galaxy devices, continuing its push in the AI market.
This developing story is expected to evolve, stay tuned for updates.
Original Story https://www.cnbc.com/2024/07/31/samsung-q2-2024-earnings-strong-ai-demand-lifts-profits.html
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