Samsung electronics said announced on Tuesday that its operating profit rose greater than 930% in the primary quarter of 2024, driven by increasing demand for its servers, memory chips and storage for AI applications.
The company that struggled in 2023 because the macroeconomic slowdown hurt demand for its productssaid its memory chip business has returned to profitability and costs have continued to rise due to solid demand for DRAM and NAND chips, high-density SSDs and servers.
Samsung said total revenue within the quarter rose 12.8% year-on-year to KRW 71.2 trillion (US$52.2 billion), while net profit rose 330% year-on-year to KRW 6.75 trillion (4 .88 billion US dollars) rose. Operating profit rose to KRW 6.61 trillion (US$4.77 billion) within the quarter from KRW 640 billion (around US$462 billion) a 12 months ago.
Most of the advance got here from Samsung's semiconductor business The division's revenue rose to KRW 23.14 trillion (US$16.71 billion) in the primary quarter from KRW 13.73 trillion (US$9.92 billion) a 12 months ago, reflecting strong demand for DDR5 chips and memory for AI servers. The department reported an operating profit of 1.91 trillion KRW (US$1.3 billion) within the quarter, in comparison with an operating lack of 4.58 trillion KRW (US$3.3 billion) in the primary quarter of 2023 and an operating lack of KRW 2.18 trillion (US$1.57 billion). within the fourth quarter of 2023.
Mass production plans in 2024
Samsung has been desperate to meet the increasing computing power needs of generative AI and the servers needed to host the mountains of knowledge on which the models are trained. The company announced last 12 months that it might double production High bandwidth storage (HBM) chips utilized in AI, 5G, the Internet of Things (IoT), graphics processing applications, virtual reality and augmented reality systems. These chips offer faster data processing and lower power consumption in comparison with traditional NAND memory chips.
In line with this goal, Samsung announced on Tuesday that it has begun mass production of high-performance memory chips corresponding to the HBM3E 8H (8-layer) DRAM. in addition to V9 NAND chips, typically used in enterprise servers, AI and cloud devices. The company said it also wants to supply HBM3E 12H (12-layer) chips within the second quarter of this 12 months.
Samsung is the world's largest memory chip maker and competes with Micron and SK Hynix, a Korean memory chip maker, within the HBM chip market. micron Kicked away its mass production of 8-layer HBM3E semiconductors in February and last month NVIDIA's Terms and Conditions 2024SK Hynix said it has also began mass production of HBM3E crisps.
Regarding its foundry business, Samsung said the event of 3-nanometer and 2-nanometer AI chips is “progressing easily.”
Optimistic forecast
Samsung expects demand to stay strong within the second half of this 12 months, supported by increasing adoption of generative AI.
“Business conditions will improve within the second half of 2024 are expected “We wish to remain positive as demand – particularly within the generative AI space – stays strong despite continued volatility related to macroeconomic trends and geopolitical issues,” the corporate said in an announcement.
“In servers and storage, the continued increase in the provision of AI servers and the associated expansion of associated cloud services will increase demand not just for HBM, but additionally for traditional servers and storage solutions. Mobile device demand is anticipated to stay stable within the quarter, while PC customers are expected to be affected by slow seasonality, so that they are more likely to adjust their inventories ahead of recent product launches within the second half of the 12 months,” the corporate said.
Two weeks ago, The The Biden administration agreed To provide Samsung with as much as $6.4 billion in direct funds under the CHIPS and Science Act to construct semiconductor factories in Texas.
The grant will enable the South Korean electronics giant to develop cutting-edge chips by investing in two recent logic chip factories, a research and development facility, a contemporary packaging facility in Taylor and the expansion of its existing facility near Austin. micron And TSMC In addition, subsidies are to be received to strengthen domestic semiconductor production.
