Samsung Electronics anticipates a robust increase in chip demand in the latter half of this year, driven by artificial intelligence, as the company reported a more than fifteenfold year-on-year increase in second-quarter operating profit.
In a statement, Samsung said: “In the second half of 2024, as major cloud service providers and enterprises expand their investments in artificial intelligence, AI servers are expected to take up a larger share of the (memory) market.”
Propelled by the AI boom, the rebound in semiconductor prices has significantly boosted the second-quarter earnings of the world’s largest memory chip, smartphone, and TV manufacturer from a low base in the same period last year.
Samsung's stock price rose 0.9% in early trading, while the benchmark index increased by 0.5%.
Samsung reported an operating profit of 10.4 trillion won ($7.52 billion) from April to June, compared to 670 billion won in the same period last year.
This marks Samsung's highest operating profit since the third quarter of 2022, primarily thanks to the resurgence of the chip division, which has become a cash cow for the tech giant after a post-pandemic slump in demand for devices using chips.
The chip division reported earnings of 6.45 trillion won, the highest since the second quarter of 2022, and achieved profitability for the second consecutive quarter.
The explosive demand for high-end DRAM chips, such as high-bandwidth memory (HBM) chips used in AI chipsets, and chips in data center servers and devices running AI services, has helped to boost chip prices.
