News & Analysis

Samsung projects 15-fold profit increase in Q2 2024

7th July 2024
Sheryl Miles

Samsung Electronics has projected a significant increase in profits for the second quarter of 2024, anticipating a rise of over 1,400% compared to the same period last year.

This surge is attributed to the growing demand for artificial intelligence (AI) technologies, which has led to higher usage and increased prices of advanced chips.

As the world's largest manufacturer of memory chips, smartphones, and televisions, Samsung expects its operating profit for the three months ending 30th June 2024 to be around ₩10.4 trillion (£5.9 billion; $7.54 billion). This is a substantial leap from the ₩670 billion reported in Q2 2023 and surpasses analysts' forecasts of ₩8.8 trillion, according to LSEG SmartEstimate.

In early trading hours in Seoul, the announcement led to Samsung’s shares rising by over 2%, outperforming the wider market increase of 0.4%. The company is set to release detailed second-quarter earnings on 31st July 2024.

Revenue for Q2 2024 is estimated to have increased by 23% from the same period last year, reaching ₩74 trillion. This marks the most profitable quarter for Samsung since Q3 2022.

Samsung's semiconductor division is expected to have recorded its second consecutive quarterly profit, showing improvement over the first quarter, as memory chip prices steadily recover from a low point experienced between mid-2022 and the end of 2023 due to reduced post-pandemic demand for electronics. During the second quarter, memory chip prices increased by about 13% to 18% for DRAM chips used in tech devices and 15% to 20% for NAND Flash chips used for data storage.

However, Samsung has been lagging behind its South Korean rival, SK Hynix, in supplying high-end HBM chips to customers like Nvidia.

Despite potential operational challenges, including a planned three-day strike by a workers' union demanding a more transparent system for bonuses and time off, Samsung remains optimistic about its growth trajectory.

The company continues to be supported by strong demand in the AI sector and its strategic investments in advanced technologies.

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