Samsung's Q2 profit soars by over 1,450% amid AI demand
Samsung Electronics has reported a remarkable increase in its second-quarter operating profit for 2024, which rose by an astounding 1,458.2%. This surge is primarily attributed to the strong market demand for its advanced memory chips. These chips are essential components in artificial intelligence (AI) training. The company's revenue also experienced a significant boost of 23.42% compared to the same period last year.
Samsung's Q2 results surpass market expectations
Samsung's Q2 results surpassed market expectations, with revenue reaching W74.07 trillion (about $53.45 billion), slightly higher than the predicted W73.74 trillion. The operating profit also exceeded forecasts, standing at W10.44 trillion compared to the estimated W9.53 trillion. The company attributes this robust performance to increased demand for both high-bandwidth and conventional memory like regular dynamic random access memory (DRAM).
Samsung anticipates sustained AI demand for server products
Samsung anticipates that the demand from server AI will continue to be strong across server products including High Bandwidth Memory (HBM), server DRAM, and Solid State Drive (SSD). However, the company has warned that expanding capacity to meet this demand could impact the supply of conventional memory chips. To address this issue, Samsung plans to increase sales of HBM3E —its latest AI memory product— and SSDs, which are currently in high demand for AI servers.
Samsung announces Q2 dividend amid AI boom
Samsung has announced a Q2 dividend of W361 per common and preferred share, amounting to approximately W2.45 trillion in total. This decision comes amid an AI boom that has significantly benefited top memory chipmakers like Samsung Electronics and SK Hynix. However, Samsung's smartphone sales saw a decline in Q2, primarily due to the "base effect of launches of new models" in Q1. Despite this setback, the Galaxy S24 series continued to see strong demand.
Samsung continues to invest in Galaxy AI functionality
Looking ahead, Samsung expects growth in the premium segment in the second half of the year, although it anticipates a slowdown in the mass segment. The company plans to continue promoting its premium Galaxy AI products and recently announced global availability for its newest Galaxy devices including Galaxy Z Fold6, Z Flip6, Watch Ultra and Ring. "Even in challenging circumstances, we will continue investing in upgrading Galaxy AI functionality to secure a long-term sustainable growth engine," stated Samsung.
