Samsung Expects Profits to Surge Over 1,400%


Samsung Electronics anticipates a remarkable 15-fold increase in profits for the second quarter of 2024 compared to the same period last year, driven by a surge in demand for advanced AI chips. As the world’s leading manufacturer of memory chips, smartphones, and televisions, the South Korean tech giant is capitalizing on the AI boom which has elevated the prices of cutting-edge semiconductor technologies.

The announcement has already propelled Samsung shares up by more than 2% in early trading on the Seoul stock exchange. Earlier this year, the company reported a more than 10-fold increase in profits for the first quarter, exceeding analysts’ expectations.

For the second quarter, Samsung forecasts a profit of 10.4 trillion won ($7.54 billion), a significant rise from 670 billion won last year, surpassing the estimated 8.8 trillion won by analysts according to LSEG SmartEstimate.

“We are currently experiencing soaring demand for AI chips, particularly in data centers and smartphones,” explained Marc Einstein, chief analyst at ITR Corporation in Tokyo, highlighting the pivotal role of AI in driving market optimism and sector-wide earnings growth.

The AI boom has not only boosted Samsung but has also propelled the broader market rally, contributing to record highs for indices like the S&P 500 and Nasdaq in the United States. Nvidia, a leading chip manufacturer, saw its market value exceed $3 trillion last month, briefly becoming the world’s most valuable company.

“The surge in AI that significantly benefited Nvidia is also amplifying Samsung’s earnings and the entire sector’s,” added Mr. Einstein.

Samsung Electronics, a cornerstone of the South Korean conglomerate Samsung Group, faces challenges ahead with a potential three-day strike by workers starting next week. The union is advocating for a more transparent bonus and time-off system, reflecting ongoing labor tensions amidst the company’s robust financial performance.

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