South Korean giant Samsung Electronics announced on Tuesday that it had increased its operating profit almost tenfold year-on-year in the first quarter of 2024, thanks to robust demand for memories and other high-value-added products used in artificial intelligence systems. generative.
From January to March, Samsung’s operating profit reached 6.61 trillion won (4.5 billion euros), compared to 640 billion a year earlier, according to a press release.
Net profit (group share) increased almost fivefold to 6,620 billion won, for turnover up 12.8% year-on-year to 71,920 billion won (48.8 billion euros). .
The results beat analysts’ forecasts, who on average expected a net profit of 4.99 trillion won, according to a survey by financial data firm Yonhap Infomax.
The semiconductor sector, including Samsung and one of the world’s largest producers, has returned to profit and expanded “by meeting demand in the areas of servers, storage, PCs and mobile phones”, depending on the group.
This success is partly due to “the concentration on products with high added value” such as HBM (high bandwidth memories), DDR5 (dynamic random access memories used in particular in artificial intelligence systems), SSDs (disks static semiconductor devices) for servers or even UFS 4.0, a powerful and ultra-fast storage tool for smartphones.
Solid demand
“Looking ahead to the second quarter, the industry is expected to remain strong, driven primarily by demand for generative AI,” predicted the group, which believes that devices using this technology constitute “a major growth opportunity as Smartphone sales show signs of recovery.
Good sales of high-end S24 smartphones and an increase in semiconductor prices also had a positive impact on the results. And the depreciation of the won, which has lost 7% against the dollar since the start of the year, had a positive impact of 300 billion won (200 million euros) on operating income.
South Korean chipmakers, led by Samsung, have posted record profits in recent years thanks to soaring prices of their products. But the slowdown in the global economy subsequently dealt a blow to their sales.
However, the semiconductor market is expected to recover this year and experience growth of 11.8%, according to industry observatory World Semiconductor Trade Statistics.
The South Korean SK Hynix, the world’s second largest memory manufacturer, announced in January that it had returned to profit after four consecutive quarters of losses.
According to Brady Wang, associate director of market research firm Counterpoint, Samsung “will benefit in the future from the recovery of the smartphone market, the escalation of DRAM prices and a slight decline in interest of the Fed.
“Samsung is strategically positioned to thrive in changing market conditions,” he told AFP.
But to continue its momentum, the technology giant must “focus on accelerating development in emerging areas such as high-bandwidth memory, crucial for AI and high-performance computing,” said this analyst.
Semiconductors are the heart of the global economy. They are used in everything from household appliances and cell phones to cars and weapons.
Demand for advanced components for artificial intelligence systems has skyrocketed in recent months thanks to the success of ChatGPT and other generative AI products.
Semiconductors are South Korea’s top export, earning the country $11.7 billion in March, the highest level in nearly two years, according to official statistics. This represents a fifth of the country’s total exports.
