Samsung Electronics anticipates a dramatic surge in profits for the second quarter of 2024, projecting a 15-fold increase compared to the same period last year.
This significant rise is attributed to an artificial intelligence (AI) boom that has elevated the prices of advanced chips, substantially boosting the company’s forecast for the quarter.
The South Korean tech giant, renowned as the world’s largest producer of memory chips, smartphones, and televisions, saw its shares climb over 2% during early trading in Seoul following the announcement.
The firm also reported a more than 10-fold increase in profits for the first quarter of this year.
For the current quarter, Samsung expects its profit to soar to 10.4 trillion won ($7.54 billion; £5.9 billion), a substantial jump from 670 billion won last year.
This estimate surpasses analysts’ predictions of 8.8 trillion won, according to LSEG SmartEstimate.
“Right now we are seeing skyrocketing demand for AI chips in data centers and smartphones,” commented Marc Einstein, chief analyst at Tokyo-based research and advisory firm ITR Corporation.
The enthusiasm surrounding AI has contributed to a broader market rally over the past year, propelling the S&P 500 and the Nasdaq in the United States to new records recently.
Last month, the market value of chip-making giant Nvidia surged past $3 trillion, briefly becoming the world’s most valuable company.
“The AI boom which massively boosted Nvidia is also boosting Samsung’s earnings and indeed those of the entire sector,” added Mr. Einstein.
Samsung Electronics, the flagship unit of the South Korean conglomerate Samsung Group, is also facing potential labor unrest.
Next week, a union of workers plans a possible three-day strike starting Monday, demanding a more transparent system for bonuses and time off.
Source-BBC
