Image source, Getty Images
- author, Joao da Silva
- role, Business reporter
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Samsung Electronics expects its profits for the three months ending June 2024 to increase 15-fold from the same period last year.
The artificial intelligence (AI) boom is driving up prices for advanced chips, prompting the company to raise its second-quarter outlook.
The South Korean technology giant is the world's largest maker of memory chips, smartphones and televisions.
The announcement sent Samsung shares up more than 2% during trading hours in Seoul.
The company said it expects its profit for the current quarter to rise to 10.4 trillion won ($7.54 billion, £5.9 billion), up from 670 billion won last year.
This exceeds analysts' expectations of 8.8 trillion won, according to LSEG SmartEstimate.
“We're seeing a surge in demand for AI chips in data centers and smartphones right now,” said Mark Einstein, principal analyst at Tokyo-based research and consulting firm ITR Corp.
Optimism about AI is one of the reasons for the broad market rally last year, with the U.S. S&P 500 and Nasdaq hitting new records on Wednesday.
Chipmaker Nvidia's market capitalization surpassed $3 trillion last month, briefly holding the top spot as the world's most valuable company.
“The AI boom that has given Nvidia such a boost is also boosting Samsung's revenues and the industry as a whole,” Einstein added.
Samsung Electronics is the flagship division of South Korean conglomerate Samsung Group.
The tech company could face a three-day strike next week, due to begin on Monday, with unions demanding a more transparent system for bonuses and holidays.
