Samsung Electronics Q1 profit soars by 930%, exceeding expectations
Samsung Electronics reported a remarkable 932.8% increase in its operating profit for the first quarter of 2024 (January to March), according to the company's announcement. This significant surge is primarily due to a rebound in memory chip prices, driven by optimism surrounding artificial intelligence (AI). The company's Q1 results revealed a revenue of 71.92 trillion Korean won (approximately $52.3 billion), slightly surpassing the estimated 71.04 trillion Korean won.
Samsung's Q1 operating profit outperform forecasts
Samsung's operating profit for the first quarter reached 6.61 trillion Korean won, surpassing the anticipated figure of 5.94 trillion Korean won. The revenue for the quarter ending in March rose by 12.81% compared to the same period last year, while the operating profit soared by an impressive 932.8%. "The company posted KRW 71.92 trillion in consolidated revenue on the back of strong sales of flagship Galaxy S24 smartphones and higher prices for memory semiconductors," Samsung Electronics stated on Tuesday.
Analysts maintain positive outlook on Samsung's future
Citi analysts remain optimistic about Samsung's NAND flash memory business due to rising demand for AI computing. They have maintained their "buy" rating on the firm with a target price of 120,000 won — a significant increase from Monday's closing price of 76,700 won. As the world's largest manufacturer of dynamic random-access memory chips (DRAM), Samsung anticipates that generative AI will drive demand in the second quarter, while mobile demand remains steady.
Samsung's strategy amid market challenges
Despite increasing geopolitical instability and ongoing cost hikes in major components, Samsung aims to maintain cost competitiveness throughout its R&D, manufacturing, and sales processes. The company expects a slight dip in profitability in Q2 compared to Q1. The company also revealed that development of 3-nanometer and 2-nanometer processes is "progressing smoothly." Samsung started mass production of 3-nanometer chips in 2022 and plans to begin mass production of 2-nanometer chips in 2025.
Samsung's semiconductor business marks significant recovery
Samsung's semiconductor business reported a 1.91 trillion Korean won operating profit in the first quarter, marking a significant recovery from a loss of 4.58 trillion won in Q1 2023 and a loss of 2.18 trillion Korean won in Q4 2023. In April, Samsung began mass production of HBM3E 8H and V9 NAND to meet AI demand. The company plans to mass produce HBM3E 12H products and a 128GB product based on 1b nanometer 32GB DDR5 within the second quarter.
