Samsung Electronics released its first-quarter results on Tuesday, reporting a tenfold increase in operating profits compared to the previous year, propelled by resurging chip prices and surging demand, particularly for generative AI.
Samsung Electronics attributed its success to a strategic focus on high-value-added products and robust smartphone sales
The company’s operating profit surged to KRW 6.61 trillion ($4.85 billion), with sales climbing 12.8 per cent year-on-year to reach 71.9 trillion won.
According to Samsung, the Memory Business played a pivotal role in driving profits, benefiting from the resurgence in demand for high-value-added products.
The company’s emphasis on advanced technologies like High-Bandwidth Memory (HBM), crucial for AI hardware, contributed significantly to its stellar performance.
Tommy Kwon, vice president of Samsung’s system LSI business, highlighted the sustained demand for on-device AIs and high-resolution features, underpinning the company’s production strategies.
Furthermore, the depreciation of the Korean won against the US dollar provided a favourable boost to Samsung’s operating profit.
Samsung remains optimistic about its second-quarter outlook, anticipating a continuation of strong industry performance, primarily driven by the escalating demand for generative AI.
Market analysts reflected this sentiment, citing factors such as the resurgence in the smartphone market, increasing DRAM prices, and a modest decline in Federal Reserve interest rates as favourable tailwinds for Samsung’s future growth.
In a statement, Brady Wang, associate director of Counterpoint, urged the tech giant to accelerate development in emerging areas like high-bandwidth memory crucial for AI and high-performance computing.
Semiconductors remain the backbone of the global economy, powering a wide array of devices from household appliances to cutting-edge AI systems.
The increasing demand for advanced chips, particularly those driving AI technologies, has strengthened South Korea’s semiconductor industry, which saw exports surge to $11.7 billion in March, reaching their highest level in almost two years.
Samsung’s performance in the first quarter indicates a wider recovery in the semiconductor market, aligning with projections of an 11.8 per cent growth this year, according to the World Semiconductor Trade Statistics.
Industry experts highlighted Samsung’s focus on innovation and diversification as key to maintaining its drive in the fiercely competitive semiconductor landscape.
Tom Kang, research director of Counterpoint, noted Samsung’s surprise earnings, driven by the rebound in memory demand and the overall favourable market environment.
)
