Samsung Electronics on Tuesday reported a 10-fold increase in operating profit for the last quarter as the expansion of artificial intelligence technologies drives a rebound in the markets for computer memory chips.
The South Korean semiconductor and smartphone giant said its
operating profit for the Jan-March quarter came in at 6.6 trillion won ($4.8
billion), up from the 640 billion won ($465 million) it earned during the same
period last year.
Revenue rose by nearly 13% to 71.9 trillion won ($52
billion), driven by higher prices for memory chips and robust sales of its
flagship Galaxy S24 smartphones, the company said.
The company earned 1.91 trillion won ($1.38 billion) in
operating profit from its semiconductor business, marking the division’s first
quarterly profit since the fourth quarter of 2022, as the chip market continues
to recover from a cyclical slump deepened by the COVID-19 pandemic and global
trade tensions.
Samsung projected the memory chip market to remain strong in
the coming months, driven by the expansion of generative AI technologies, which
is increasing the demand for both conventional chips used in servers and
advanced chips designed to process AI, including high-bandwidth memory, or HBM.
Responding to higher demands for AI chips, Samsung said it
started this month the mass production of its latest HBM chips, called 8-layer
HBM3E, and that it plans to start producing the 12-layer version of the chips
during the second quarter.
“In the second half of 2024, business conditions are
expected to remain positive with demand — mainly around generative AI — holding
strong, despite continued volatility relating to macroeconomic trends and
geopolitical issues,” Samsung said in a statement.
For smartphones, the company will continue to focus on
boosting the sales of its flagship device, Galaxy S24, which is built with an
array of new features enabled by AI, including live translation during phone
calls in 13 languages and 17 dialects.
Samsung said it plans to expand AI features beyond the S24
to other mobile devices as it expects the technologies to drive growth in the
smartphone market in coming months amid improvements in global consumer
spending.
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