top of page

Samsung anticipates a profit increase exceeding 1,400%

By D. Maan, Jadetimes News

 

Surge in Profits Driven by AI Boom


Samsung Electronics anticipates a remarkable 15 fold increase in profits for the three months leading up to June 2024 compared to the same period last year. This surge is attributed to the booming artificial intelligence (AI) sector, which has driven up prices for advanced chips. As the world's largest manufacturer of memory chips, smartphones, and televisions, Samsung has benefited significantly from this trend, resulting in a robust forecast for the second quarter.


Market Impact and Share Performance


The announcement of Samsung's expected profit jump led to a more than 2% increase in its shares during early trading hours in Seoul. The company also reported a more than 10 fold increase in profits for the first quarter of this year. For the current quarter, Samsung expects its profits to rise to 10.4 trillion won ($7.54 billion; £5.9 billion), a significant increase from 670 billion won last year. This projection surpasses analysts' forecasts of 8.8 trillion won, as reported by LSEG SmartEstimate.


AI Chip Demand and Broader Market Rally


According to Marc Einstein, chief analyst at Tokyo based research and advisory firm ITR Corporation, there is currently skyrocketing demand for AI chips in data centers and smartphones. This demand has contributed to a broader market rally over the past year, pushing the S&P 500 and the Nasdaq in the United States to new records. The market value of chip making giant Nvidia surged past $3 trillion last month, briefly making it the world's most valuable company. The AI boom that significantly boosted Nvidia's earnings is also propelling Samsung's profits and the entire sector.


Upcoming Challenges and Labor Disputes


Despite the positive financial outlook, Samsung Electronics faces potential challenges ahead. The company is bracing for a possible three day strike starting next Monday, organized by a union of workers demanding a more transparent system for bonuses and time off. As the flagship unit of the South Korean conglomerate Samsung Group, the outcome of this labor dispute could impact the company's operations and future profitability.

More News

bottom of page