From CNBC: 2024-04-29 19:55:46

Samsung Electronics reported a 932.8% increase in operating profit for the first quarter thanks to surging memory chip prices driven by AI optimism. Revenue hit 71.92 trillion Korean won ($52.3 billion), a 12.81% rise from last year, as profit soared to 6.61 trillion Korean won. The company’s strong sales of Galaxy S24 smartphones and memory semiconductors fueled the growth.

Samsung’s operating profit surge was expected, following the company’s guidance earlier this month that predicted a 931% rise to 6.6 trillion Korean won. The record losses in 2023 were reversed by addressing demand for high-value products in their Memory Business. Samsung remains the largest DRAM chip manufacturer worldwide, playing a critical role in multiple consumer devices.

Analysts anticipate a further increase in memory chip prices impacting Samsung’s second-quarter earnings due to a growing AI demand. Citi analysts foresee a 56% upside in Samsung’s stock price, with NAND being identified as a vital memory chip like DRAM. Competitors like SK Hynix are advancing in AI memory solutions, challenging Samsung’s position in the market.

Samsung faces growing competition as the U.S. government granted funding to Samsung, Micron, and TSMC to bolster chip production in America. In Japan, Rapidus Corporation received subsidies to mass produce 2-nanometer chips by 2027, posing a new threat. As rivals like SK Hynix innovate AI memory solutions, Samsung must focus on maintaining its leadership position amidst fierce competition.

Despite challenges, Samsung regained its top spot in smartphone shipments in the first quarter, reclaiming the lead from Apple according to International Data Corp. As the industry shifts towards an AI-driven era, Samsung’s strategic focus on memory chip innovation and AI technology will be crucial to sustaining its growth and market leadership.



Read more at CNBC:: Samsung Electronics’ operating profit jumps 932.8% in first quarter, beats expectations