Rise in Samsung Q2 Profit on AI Boom, Can It Beat Apple? – Industry Leaders Magazine
Samsung Electronics expected Q2 profit is going to increase 13-fold from a year earlier due to boost in demand for artificial intelligence (AI) technology fueling a rebound in memory chip prices. Operating profit for Samsung, world’s biggest maker of memory chips, smartphones and TVs likely rose to $6.34 billion in Q2 ending on 30. This is as per the average of an LSEG SmartEstimate from 27 analysts, weighted toward those who are more consistently accurate.
The amount of $6.34 billion would be Samsung’s highest profit since the Q3 of 2022. It compares with an operating profit of 670 billion won in second quarter of last year.
Performance at the tech giant Samsung’s key semiconductor division likely continued to improve its second consecutive quarterly profit for Q2. This is as memory chip prices keep rising from a mid-2022 to end-2023 trough that was caused by weak post-pandemic demand for gadgets that use the chips.
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 run AI services are underpinning a broad recovery in the chip industry, analysts said.
During the second quarter, memory chip prices jumped by about 13% to 18% versus the previous quarter for DRAM chips used in tech devices and 15% to 20% for NAND Flash chips used for data storage, according to data provider TrendForce.
Samsung is expected to compete with rival Apple at the top end of the market when it launches its latest flagship foldable phones and mobile accessories, including a new ring for health monitoring, on July 10 in Paris.
Estimated Q2 operating profit at Samsung’s chip division was 4.6 trillion won according to an average of 10 analysts’ forecasts. This compares to a loss of 4.36 trillion won for the same period last year.
Its mobile business likely saw its Q2 operating profit shrink versus last year despite shipping a similar number of smartphones, analysts said, due to steeper parts’ costs and higher marketing and development costs for AI services.
The mobile business likely reported an operating profit of around 2.2 trillion won, according to an average of forecasts from 10 analysts, down from a 3.04 trillion won profit a year ago.
Samsung shares closed at a price of 84,300 KRW, which is +2,500 (3.06%).
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