Samsung Electronics reported a stellar turnaround in its first-quarter profits, fueled by a resurgence in memory chip demand and a growing market for artificial intelligence (AI) technologies. The company announced a staggering 933% year-on-year increase in operating profits, reaching 6.6 trillion won ($4.8 billion) for the quarter. This marks a sharp reversal from the previous six quarters, which had seen a continuous profit decline.
The windfall is attributed primarily to a rebound in memory chip prices. After a slump triggered by the pandemic and global trade tensions, the memory chip market is experiencing renewed vigor. This resurgence coincides with the rise of AI, which is driving demand for both traditional server chips and advanced AI processing units that require high-bandwidth memory (HBM). Samsung, a leading player in the memory chip industry, is well-positioned to capitalize on this trend.
“Operating profit increased to KRW 6.61 trillion ($4.85 billion) as the Memory Business returned to profit by addressing demand for high value-added products,” Samsung stated in a press release. The company’s semiconductor business, which includes memory chips, raked in a profitable 1.91 trillion won ($1.38 billion) in Q1, marking its first quarterly profit since the end of 2022.
Samsung is optimistic about the memory chip market’s continued strength. The company anticipates that the growth of generative AI technologies will further fuel demand for memory chips, propelling continued profitability. Samsung is also planning to ramp up production of HBM chips to meet the rising needs of the AI sector.
Beyond memory chips, Samsung’s smartphone division also contributed to the positive quarter. The company’s flagship Galaxy S24 smartphones reportedly enjoyed strong sales, contributing to a near 13% rise in overall revenue, which reached 71.9 trillion won ($52 billion).
This significant profit turnaround positions Samsung for a strong year ahead.
The company’s strategic focus on high-value memory chips and commitment to innovation in the AI space position it to capitalize on key market trends.
