Samsung Forecasts AI-Driven Growth, Reports Staggering Q1 Profits
Reported by Bodheet Bhardwaj
In a recent announcement, Samsung Electronics shared its bright outlook for the rest of 2024, fueled by the booming demand for artificial intelligence (AI) technologies. The tech giant reported a whopping tenfold increase in its first-quarter operating profit, mainly driven by the soaring demand for memory chips in the AI sector.
Samsung’s confidence in sustained growth stems from the promising prospects of generative AI, a trend expected to drive demand in the coming months. Despite potential economic and geopolitical uncertainties, the company remains optimistic about continued success.
Market response to Samsung’s forecast was positive, with a notable 1.6% surge in its shares during morning trading, outpacing the benchmark index’s modest uptick.
During the January-March period, Samsung’s operating profit reached a remarkable 6.6 trillion won ($4.8 billion), marking its highest since the third quarter of 2022. Revenue climbed by 13%, with memory chip sales nearly doubling, showcasing the company’s strong performance.
The memory chip segment, crucial for Samsung’s profitability, rebounded impressively, reversing a loss from the previous year. This turnaround can be attributed to strategic investments from customers anticipating future price increases in NAND flash and DRAM chips.
Samsung’s competitor, SK Hynix, also shared optimism, foreseeing a full recovery in the memory chip market driven by AI demand. Additionally, Samsung announced the mass production of its latest high bandwidth memory (HBM) chips, tailored for generative AI chipsets, highlighting its commitment to seizing opportunities in the AI revolution.
With plans for further innovation and production expansion, Samsung’s outlook remains bright, reflecting the company’s position at the forefront of the AI-driven technology landscape.
