Samsung Electronics expects its profits for the three months ending June 2024 to surge 15-fold compared to the same period last year. An artificial intelligence (AI) boom has driven up the prices of advanced chips, significantly boosting the South Korean tech giant’s forecast for the second quarter.
As the world’s largest maker of memory chips, smartphones, and televisions, Samsung saw its shares rise more than 2% during early trading hours in Seoul following the announcement. The company also reported a more than 10-fold increase in profits for the first quarter of this year.
For the current quarter, Samsung anticipates a profit of 10.4 trillion won ($7.54 billion; £5.9 billion), up from 670 billion won last year. This figure surpasses analysts’ forecasts of 8.8 trillion won, according to LSEG SmartEstimate.
“Right now we are seeing skyrocketing demand for AI chips in data centers and smartphones,” said Marc Einstein, chief analyst at Tokyo-based research and advisory firm ITR Corporation.
The optimism surrounding AI has contributed to a broader market rally over the past year, pushing the S&P 500 and Nasdaq in the United States to new records. Last month, the market value of chip-making giant Nvidia briefly surpassed $3 trillion, making it the world’s most valuable company.
“The AI boom which massively boosted Nvidia is also boosting Samsung’s earnings and indeed those of the entire sector,” added Mr. Einstein.
Samsung Electronics is the flagship unit of the South Korean conglomerate Samsung Group. Despite the positive outlook, the company faces a potential three-day strike starting Monday. A union of workers is demanding a more transparent system for bonuses and time off.
Melissa Enoch
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