Surge in AI demand expected to increase sales of memory chips and other technology devices
South Korean technology giant Samsung Electronics expects strong demand for artificial intelligence (AI) in the second half of 2024.
The surge in demand is expected to increase sales of memory chips and other technology devices. The company reported a 10-fold increase in operating profit for the first quarter.
During the first quarter, Samsung's memory chip sales nearly doubled from a year earlier. The rise in prices has been accelerated by the AI boom. Looking ahead, the company remains optimistic about the business situation in the second half of the year, particularly in the area of generative AI. Despite continued instability related to macroeconomic trends and geopolitical issues, Samsung expects AI-related demand to continue to surge.
On the financial front, Samsung's operating profit for the January-March period reached 6.6 trillion won (approximately $4.8 billion), a significant increase from 640 billion won a year earlier. This is in line with the company's initial expectations and marks its highest operating profit since Q3 2022. This recovery is especially noteworthy given the difficult downturn in memory chips caused by a post-pandemic slump in gadget demand.
The chip division, which has historically accounted for two-thirds of Samsung's operating profit, turned a profit of 1.91 trillion won from a loss of 4.58 trillion won in the March quarter last year.
Additionally, first-quarter revenue increased by 13% to 71.9 trillion won, with memory chip revenue alone posting an astonishing 96% jump to 17.49 trillion won.
