Samsung profitability rises After chip arm recovery to highest 2024
In contrast to average analyst projections of samsung profitability (1) 7.97 trillion won, the world’s largest manufacturer of smartphones and memory reported a six-fold increase in net income to 9.64 trillion won ($6.96 billion) in the June quarter. The largest increase in sales since 2021 was recorded by Samsung earlier this month when it revealed a 15-fold increase in preliminary operating profit and a 23% increase in revenue.
After chip arm recovery, samsung profitability rises to its highest level in 2024.
Following a surge in profits at its semiconductor division due to artificial intelligence, Samsung Electronics Co. reported its fastest rate of net income growth since 2010.
In contrast to average analyst projections of 7.97 trillion won, the world’s largest manufacturer of smartphones and memory reported a six-fold increase in net income to 9.64 trillion won ($6.96 billion) in the June quarter. The largest increase in sales since 2021 was recorded by Samsung earlier this month when it revealed a 15-fold increase in preliminary operating profit and a 23% increase in revenue.
Samsung profitability(2) of the beat indicates that a surge in spending on AI development from the US to China is helping to lift the global computing markets out of a prolonged post-Covid slump. Similar to SK Hynix Inc., Samsung offers a wide range of consumer electronics in addition to providing the semiconductors needed for storage in servers and mobile devices.
Tom Kang, director at Counterpoint Research, stated that Samsung’s memory business has completely recovered and is operating again. The unexpected profit was caused by a high demand for products related to servers, he claimed. The performance of the Galaxy S24, he claimed, also increased sales of chips, displays, display drivers, and camera sensors, which supported earnings outside of the smartphone segment.
Checkout Latest Updates – Samsung profitability rises highest in 2024
In Seoul, shares increased by about 1% on Wednesday morning. The stock of SK Hynix increased by roughly 0.2%.
After four consecutive losses, Samsung’s key semiconductor unit reported an operating profit of 6.45 trillion won, which was better than expected. This was the company’s second consecutive quarter of profitability. Rising memory costs and strong demand for high-bandwidth memory chips, or HBMs—which support AI’s need for faster processing speeds while preserving power—were major factors in its growth.
Concerns have been raised by investors regarding samsung profitability standing in the rapidly expanding HBM market. The largest company in Korea’s stock has underperformed SK Hynix, a smaller rival that is currently the top supplier of HBMs. Due to the unquenchable demand for AI accelerators, Nvidia Corp., the most valuable chipmaker in the world, has been difficult to get certified for its most recent chips.
But Samsung’s efforts to close the gap with SK Hynix are finally starting to bear fruit. According to a report this week by Bloomberg News, it has received the much-needed approval from Nvidia for the HBM3 version of its chips, and it also expects approval for the next generation, HBM3E, in two to four months.
The company stated that it will increase capacity to boost the share of HBM3E sales in the second half of this year and that it intends to “actively respond” to the demand for high-value-added products for AI.
samsung profitability (3) of the Samsung’s foundry, or contract chipmaking, business saw an increase in operating income during the quarter thanks to price increases for both DRAM and NAND. The company predicted that this unit would grow in the second half of the year due to the increased demand for high-performance computing and artificial intelligence.
Must Read : Robinhood for Crypto: Exchange Bitstamp for $200 Million
One of the biggest winners of the competition to supply parts needed to develop generative AI services akin to ChatGPT is SK Hynix. When HBM and Nvidia’s accelerators are combined, revenue from HBM increased by more than 250% in the June quarter. As a result, SK Hynix shares have increased by more than 150% since the beginning of 2023, more than tripling Samsung’s performance.
According to a statement from the company, the supply of cutting-edge products for PC and mobile is expected to be constrained because priority is being given to producing HBM and server memory by Samsung.
The customs office’s early trade data for the first 20 days of July revealed a 57.5% increase in South Korea’s semiconductor exports. As one of the biggest exporters of computer chips worldwide, Asia’s fourth-largest economy is a valuable gauge of the demand for technology around the world. Shipments of chips have increased recently.
Refrences (1) : https://www.cnbctv18.com/market/earnings/samsung-profit-surges-most-in-years-after-chip-arm-recovery-19452036.htm
Refrences (2) https://www.statista.com/statistics/237093/samsungs-operating-profit-quarterly-figures/
Refrences (3) https://www.forbes.com/sites/hyunsoorim/2024/04/30/samsung-profit-soars-tenfold-as-chip-demand-rebounds-amid-ai-boom/