By Joyce Lee
SEOUL (Reuters) – Samsung Electronics is expected to see its second-quarter profit rise 13 times from a year earlier as demand for artificial intelligence technology fuels a rebound in memory chip prices.
Operating profit at the world’s largest maker of memory chips, smartphones and TVs likely reached 8.8 trillion won ($6.34 billion) in the quarter ended June 30, according to the average of an LSEG SmartEstimate of 27 analysts, weighted toward those who are more consistently accurate.
The amount would be Samsung’s highest profit since the third quarter of 2022. It compares with an operating profit of 670 billion won in the second quarter of last year.
The tech giant’s key semiconductor division’s performance likely continued to improve its second straight quarterly profit, as memory chip prices continue to rise after a mid-2022 to late 2023 trough caused by weak post-pandemic demand for gadgets using the chips.
Explosive demand for high-end DRAM chips such as high-bandwidth memory (HBM) chips used in AI chipsets, as well as chips used in data center servers and gadgets that run AI services, are supporting a broad recovery in the chip industry, analysts said.
During the second quarter, memory chip prices rose about 13 to 18 percent from the previous quarter for DRAM chips used in technology devices and 15 to 20 percent for NAND flash chips used for data storage, according to data provider TrendForce.
Samsung’s chip division’s operating profit came to 4.6 trillion won in the second quarter, according to 10 analysts’ forecasts. This compares with a loss of 4.36 trillion won in the same period last year.
Its mobile business likely saw second-quarter operating profit decline from a year ago, despite shipping a similar number of smartphones, due to higher parts costs and higher marketing and development costs for AI services, analysts said.
The mobile business likely reported an operating profit of about 2.2 trillion won, according to an average forecast of 10 analysts, down from a profit of 3.04 trillion won a year ago.
Samsung is set to take on rival Apple at the high end of the market when it launches its latest flagship foldable phones and mobile accessories, including a new health-monitoring ring, on July 10 in Paris.
($1 = 1,387.4200 won)
(Reporting by Joyce Lee; editing by Miral Fahmy)
