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Samsung’s semiconductor unit, a critical segment of its business, recorded an operating profit of 6.45 trillion Korean Won, surpassing expectations. This marked its second consecutive profitable quarter following four successive losses read more
 "Samsung's profit reaches record pace of growth thanks to AI chip demand")
South Korea’s semiconductor exports have also seen a significant boost, jumping 57.5 per cent in the first 20 days of July, according to early trade data from the customs office. Image credit: Samsung
Samsung Electronics Co. has reported its fastest net income growth since 2010, driven by a surge in its semiconductor division fueled by the artificial intelligence boom. The world’s leading manufacturer of memory chips and smartphones saw a six-fold increase in net income, reaching 9.64 trillion Korean Won ($6.96 billion) in the June quarter.
This significantly exceeded analysts’ expectations, which averaged around 7.97 trillion Korean Won. Earlier this month, Samsung also announced a preliminary 15-fold rise in operating profit and a 23 per cent increase in revenue, marking its most substantial sales growth since 2021.
This impressive performance suggests that the global computing markets are recovering from a prolonged downturn post-COVID, partly due to increased AI development investments from both the US and China. Similar to SK Hynix Inc., Samsung provides semiconductors essential for storage in servers and mobile devices, alongside a wide range of consumer electronics.
Samsung’s semiconductor unit, a critical segment of its business, recorded an operating profit of 6.45 trillion Korean Won, surpassing expectations. This marked its second consecutive profitable quarter following four successive losses. The unit’s performance was bolstered by rising memory prices and strong demand for high-bandwidth memory chips (HBMs), which are crucial for conserving power and supporting the fast processing speeds required for AI applications.
Investors have been watching Samsung’s position in the rapidly growing HBM market with keen interest. Despite being Korea’s largest company, Samsung’s shares have lagged behind those of its smaller competitor, SK Hynix, which currently leads the HBM market. Samsung has faced challenges in getting its latest chips certified by NVIDIA., the world’s most valuable chipmaker driven by the high demand for AI accelerators.
However, Samsung is beginning to close the gap with SK Hynix. It recently received long-awaited approval from NVIDIA for its HBM3 chips and expects to gain approval for the next generation, HBM3E, within the next two to four months. This progress is significant as it positions Samsung to better compete in the lucrative AI memory chip market.
SK Hynix has greatly benefited from the race to supply components necessary for generative AI services like ChatGPT. In the June quarter, its revenue from HBM chips, paired with NVIDIA’s accelerators, surged by more than 250 per cent. This growth has propelled SK Hynix shares to rally by over 150 per cent since the start of 2023, significantly outperforming Samsung’s shares.
South Korea’s semiconductor exports have also seen a significant boost, jumping 57.5 per cent in the first 20 days of July, according to early trade data from the customs office. As Asia’s fourth-largest economy and a major exporter of computer chips, South Korea serves as a key indicator of global technology demand. The recent uptick in chip shipments reflects a broader recovery in the tech sector, signalling strong global demand for semiconductors.
Samsung’s strong performance and strategic advancements in the AI chip market underscore its ongoing efforts to reclaim its leading position in the semiconductor industry. With the AI boom continuing to drive demand, the company is well-positioned for future growth.
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English (US) ·