Samsung Electronics has recently announced that they expect a high demand for artificial intelligence technology in the second half of the year. This anticipation comes following a significant increase in their first-quarter operating profit, which saw a more than ten-fold rise.
The company disclosed that it foresees a continuation of the strong demand for AI, which is projected to boost sales of memory chips and electronic devices in the upcoming months. Notably, Samsung’s memory chip sales nearly doubled in the first quarter compared to the same period last year, driven by a surge in AI-related demand that led to a sharp increase in prices.
In light of this positive outlook, Samsung’s shares saw a 1.6% increase during morning trading, outpacing the 0.5% rise in South Korea’s benchmark index. The company reported a substantial operational profit of 6.6 trillion won ($4.8 billion) in the first quarter, marking a significant improvement from the previous year.
A year ago, Samsung’s semiconductor division, primarily responsible for memory chips, accounted for a substantial portion of the company’s profits. However, in the first quarter of this year, the division posted a profit of 1.91 trillion won, rebounding from losses in the previous year.
The demand for memory chips, fueled by AI applications, led to a notable increase in revenue for Samsung. The company’s decision to start mass-producing the latest high bandwidth memory (HBM) chips, particularly for generative AI chipsets, is expected to further capitalize on the growing AI market. Additionally, Samsung announced the production of 8-layer HBM3E chips this month, with plans to introduce the 12-layer version in the second quarter.
Despite global economic challenges and geopolitical uncertainties, Samsung remains optimistic about the business conditions in the latter half of 2024. The company’s strategic focus on AI technology and memory chip innovations is poised to drive continued growth and profitability in the evolving tech landscape.
