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Home Business Samsung To Record 15-Fold Profits In Q2 As AI Chip Demand Increases

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Samsung To Record 15-Fold Profits In Q2 As AI Chip Demand Increases

Confidence UbaniJuly 5, 20241 Mins read291

Samsung Electronics has reported a significant surge in its second-quarter profits. The South Korean tech giant, on Friday, announced a 15-fold increase in operating profit.

Its profits skyrocketed from the 670 billion won reported in June 2023 to 10.4 trillion won ($7.54 billion) for the quarter ending June 30. The surge in profits is attributed to the increasing demand for AI chips, particularly in data centres and smartphones. This demand has also favoured the growth of the S&P 500 and the Nasdaq in the United States. Nvidia also reached new records recently due to the AI boom.

Samsung’s latest earnings expectations set at 10.4 trillion won surpasses the 8.8 trillion won forecasted by analysts, according to LSEG SmartEstimate. The company’s shares saw a more than 2% rise during early trading hours in Seoul following the announcement.

This strong performance is a significant comeback for Samsung after last year’s profit plunge. The company had to cut its global chip production in response to the downturn but has rebounded. The focus on generative AI, particularly in its latest flagship smartphone model, the Galaxy S24, has helped the company regain its lead in the smartphone market.

Samsung also expects its second-quarter sales to be between 73 trillion and 75 trillion won, significantly higher than the 60 trillion won reported in the same quarter last year. The company’s revenue for the first quarter of this year was 71.92 trillion won.

Despite the solid financial performance, Samsung faces potential challenges. A union of workers has announced a possible three-day strike starting next week, demanding a more transparent system for bonuses and time off. The outcome of this labour dispute could impact the company’s operations in the near term.