Samsung expects 15-fold increase in second-quarter operating profit amid AI boom

By Kim Joo-heon Posted : July 5, 2024, 14:54 Updated : July 5, 2024, 14:54
This photo shows Samsung Electronics office in Seocho Seoul
This photo shows Samsung Electronics' office in Seocho, Seoul. Yonhap
SEOUL, July 5 (AJU PRESS) - Samsung Electronics expects its operating profit to have jumped nearly 15-fold in the second quarter, driven by surging demand for memory chips amid the artificial intelligence boom.

In its preliminary earnings guidance issued on Friday, the Korean tech giant estimated its operating profit increased by 1452.24 percent year-on-year to 10.4 trillion won during the April-June period, while revenue swelled by 23.31 percent to 74 trillion won, both far exceeding expectations.

The operating profit for the quarter alone exceeds the total for 2023, which was 6.57 trillion won. This marks the first time in seven quarters that its quarterly operating profit has surpassed 10 trillion won.

Industry sources attribute the stellar performance primarily to the improvement in the memory chip sector, driven by an increase in the average selling price (ASP) of DRAM and NAND flash memory.

"The ASPs for DRAM and NAND are estimated to have increased by 17 percent and 18 percent, respectively, compared to the previous quarter. This is driven by the expansion of high-bandwidth memory (HBM) production capacity, manufacturing process transitions and strategic production adjustments aimed at inducing memory supply shortages," said Jung Min-gyu, an analyst at Sangsangin Investment & Securities.

Samsung Electronics plans to announce its final second-quarter results on July 31.
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