Samsung Electronics anticipates a staggering surge in its first-quarter profits for 2024, forecasting a more than tenfold increase compared to the previous year.
This remarkable financial upturn is attributed to the recovery in chip prices post-pandemic and a booming demand for artificial intelligence (AI)-related products, underscoring the tech giant’s dominance in the global market.
As the leading manufacturer of memory chips, smartphones, and televisions worldwide, the South Korea-based conglomerate has made a preliminary estimate that its operating profit for the January-March quarter soared to 6.6 trillion won ($4.9 billion; £3.9 billion).
This figure represents a 931% increase over the same period in 2023, surpassing the expectations of analysts who projected profits around 5.7 trillion won.
This financial rebound is largely driven by the global resurgence in semiconductor prices, following a significant downturn last year. Estimates suggest that global memory chip prices have risen by approximately 20% over the last year, a recovery that bodes well for Samsung’s semiconductor division, traditionally the company’s most lucrative sector.
The ongoing AI technology boom is further expected to fuel sustained demand for semiconductors throughout the year.
Additionally, the recent earthquake in Taiwan on April 3 may constrict the global chip supply further, potentially allowing Samsung to increase its prices even more. Taiwan hosts a number of key chip manufacturing firms, including TSMC, which supplies to tech giants like Apple and Nvidia.
Although TSMC reported minimal impact on its production from the earthquake, some operational disruptions were acknowledged.
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Moreover, Samsung is poised to benefit from the launch of its latest flagship Galaxy S24 smartphones introduced in January. The new model has been eagerly received by the market, contributing to the company’s robust sales performance.
Samsung is set to provide a more detailed financial report on April 30, which will offer further insights into its earnings and market performance. This significant profit increase marks a pivotal moment for Samsung, highlighting its strategic positioning and adaptability in the rapidly evolving tech landscape, especially in the semiconductor and AI sectors.
