Samsung Electronics anticipates a remarkable surge in profits for the first quarter of 2024, soaring more than tenfold compared to the previous year.
This projection is attributed to the recovery in chip prices post-pandemic and the escalating demand for artificial intelligence (AI) related products.
As the world’s largest producer of memory chips, smartphones, and televisions, the South Korea-based tech giant expects its operating profit to reach 6.6 trillion won ($4.9bn; £3.9bn) for the January-March period, marking a staggering 931% increase from the same period in 2023. The figure surpasses analysts’ expectations of approximately 5.7 trillion won.
Samsung’s semiconductor division, typically its primary revenue generator, is poised to benefit significantly from the rebound in global semiconductor prices, which have surged by around 20% over the past year. The company’s earnings outlook is further buoyed by robust demand for semiconductors, particularly in AI technologies.
Moreover, the recent earthquake in Taiwan, home to major chip manufacturers like TSMC, may tighten the global chip supply, potentially allowing Samsung to capitalise on further price increases. While TSMC reported minimal production impact from the earthquake, disruptions to operations were noted.
In addition to semiconductor gains, Samsung is expected to enjoy a boost from the sales of its new flagship Galaxy S24 smartphones, launched in January. With these factors in play, Samsung is poised for a robust financial performance in the first quarter of 2024, underscoring its continued dominance in the technology sector.
Image credit: Babak Habibi
