Key Points
- Samsung eyes a 15-fold profit surge in Q2 2024.
- Operating income reaches 10.4tn won, up 1,452% YoY.
- Revenue rises 23.31% to hit a record high of 74tn won.
- The strong performance of the chip division drives profits.
Samsung’s extraordinary second-quarter profit surge has underscored the escalating memory chip demand driven by the AI boom.
The South Korean tech giant expects an operating income of around KRW10.4tn ($8.71bn), according to its preliminary earnings guidance — a meteoric rise of 1,452% from a year earlier. Revenue also shot up by a significant margin of about 23.31% to KRW74tn.
Samsung projects 15-fold surge in second-quarter as chip prices rise https://t.co/z4t2zyyB4h pic.twitter.com/agRhVlT85A
— Doug Brown, DBA (@dougbrownDBA) July 5, 2024
Chip Division Continues Stellar Performance
The financial turnaround was made possible largely because of Samsung’s chip division. After recording a nine-fold increase in operating income in the previous quarter.
The division has continued to deliver strong results this time around as well, with analysts estimating that it accounted for at least half of the company’s total operating profit in Q2.
A key factor behind this is the surge in DRAM and NAND prices since late last year, particularly for high-bandwidth memory (HBM) used in data centers.
Such components are now highly sought-after due to their usage within artificial intelligence systems; firms like Nvidia have been placing orders worth billions.
In addition, HBM3E mass production will begin during Q3 which should sustain demand and drive profitability even further upwards for Samsung.
Also contributing approximately KRW2tn to operating income was Samsung’s smartphone business unit alone – illustrating just how diverse its strengths lie across its various business units.
What Lies Ahead?
This has been described as being Samsung’s best-ever second-quarter result for two years and comes off the back of what had been a challenging year in 2023.
With the HBM demand to remain strong throughout 2024 along with this upcoming mass production of HBM3E, we can expect these figures to only increase. Furthermore, next week there are new foldable devices that are set for launching which should help boost earnings even more so.
The full earnings report is due out at the end of the month which it will provide us with a better indication about Samsung’s financial health and what its future could potentially look like.
