Samsung's Net Profit Quadruples as Chip Business Rebounds on AI Demand — Update
By Kwanwoo Jun
Samsung Electronics' net profit more than quadrupled in the first quarter, beating street views, as its flagship semiconductor business swung to profit on higher memory-chip prices amid the artificial-intelligence boom.
The upbeat earnings from the world's largest manufacturer of memory chips and smartphones offer the latest sign that the global technology industry is pulling itself out of a prolonged slump.
Net profit soared to 6.755 trillion won ($4.91 billion) from KRW1.575 trillion a year earlier, the company said Tuesday, eclipsing the KRW5.345 trillion consensus estimate of analysts polled by FactSet.
Revenue for the quarter rose 13% year over year to KRW71.916 trillion and operating profit increased 10-fold to KRW6.606 trillion, largely in line with the company's preliminary estimates.
The company's chip-making business posted KRW1.910 trillion in operating profit after four straight quarters of losses, driven by rising prices and brisk demand for powerful computing chips.
Samsung said demand for high-bandwidth memory chips that power AI systems is expected to remain strong through the second half of 2024. To meet demand, it plans to mass produce new 12-stack HBM3E products in the second quarter in addition to its eight-stack HBM3E production that began in April.
Samsung, racing with rivals to develop advanced HBM and other AI chips, looks to expand its chip-making facilities in Texas after getting a $6.4 billion U.S. government grant earlier this month.
The company plans to add a second chip-making factory, an advanced chip-packaging facility and research-and-development capabilities in Taylor, Texas, raising its investment there to roughly $45 billion.
Solid performances from Samsung's other businesses also supported its strong quarterly results. The company said its smartphone business stayed firm, thanks to the recent launch of its new Galaxy S24 flagship model with generative-AI devices. Samsung was the world's top smartphone seller in the first quarter, reclaiming the title after briefly losing out to chief rival Apple at the end of 2023, preliminary data from research firm International Data Corp. showed.
Samsung shares rose 5.0% in the first quarter and were 1.4% higher at KRW77,800 on Tuesday.
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com
(END) Dow Jones Newswires
April 29, 2024 23:07 ET (03:07 GMT)
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