Image source, Getty Images
- Author, Joao da Silva
- Role, Economic journalist
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Samsung Electronics expects its profit for the three months through June 2024 to rise 15 times from the same period last year.
The rise of artificial intelligence (AI) has driven up prices for advanced chips, pushing up the company’s second-quarter forecast.
The South Korean tech giant is the world’s largest maker of memory chips, smartphones and televisions.
The announcement sent Samsung shares up more than 2 percent in early trading in Seoul.
For the quarter, the company said it expected its profit to reach 10.4 trillion won ($7.54 billion; £5.9 billion), up from 670 billion won last year.
This exceeded analysts’ forecast of 8.8 trillion won, according to LSEG SmartEstimate.
“We are currently seeing increasing demand for AI chips in data centers and smartphones,” said Marc Einstein, chief analyst at Tokyo-based research and consulting firm ITR Corporation.
Optimism about AI is one reason for the broad market rally over the past year, which pushed the S&P 500 and Nasdaq in the United States to new records on Wednesday.
Chipmaker giant Nvidia’s market capitalization surpassed $3 trillion last month, briefly taking the top spot on the list of the world’s most valuable companies.
“The AI boom that has given Nvidia a huge boost is also giving Samsung and, indeed, the entire industry a big boost,” Einstein added.
Samsung Electronics is the flagship unit of South Korean conglomerate Samsung Group.
Next week, the tech company is facing a three-day strike, set to begin Monday, as a workers’ union demands a more transparent system for bonuses and vacations.
