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Samsung anticipates $4.9 billion profit in first quarter with resurgence in chip demand

Samsung Electronics has reported a significant increase in its operating profit for the first quarter, surpassing market expectations. The company’s operating profit is estimated to have surged more than 10-fold on the back of strong demand for memory chips.

According to Samsung Electronics, the first-quarter operating profit is expected to reach 6.6 trillion won ($4.9 billion), which is a remarkable 931.3 per cent increase from the previous year. This figure also exceeded the market’s average estimate by 20.5 percent.

Sales for the January-March period also saw a notable increase, rising by 11.4 per cent to 71 trillion won. This marks the first time that the company’s quarterly revenue has exceeded the 70 trillion-won mark since the fourth quarter of 2022. However, Samsung did not provide an estimate for net income.

In 2023, Samsung Electronics reported a decrease in sales to 258.93 trillion won, down 14.3 per cent from the previous year. The annual operating profit also saw a significant decline, dropping by 84.9 per cent to 6.56 trillion won, while net profit tumbled by 72.2 per cent to 15.48 trillion won.

Market watchers anticipate that Samsung’s semiconductor unit, responsible for the chip business, will return to profitability for the first time in five quarters. The company has been focusing on the development of fifth-generation HBM chips, which have the industry’s largest capacity of 36 gigabytes and are crucial for AI computing applications.

The increasing demand for memory chips, particularly in the context of emerging technologies like generative AI, has played a key role in Samsung Electronics’ strong performance in the first quarter. Overall, the company’s strategic approach to innovation and product development seems to be paying off in the current market landscape.

IANS

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