Electronics group: Samsung records surprisingly strong profits

Thanks to rising chip prices and strong demand for AI applications, electronics giant Samsung was able to record significant growth in the second quarter of 2024. The South Korean company’s operating profit rose to 10.44 trillion won (around 7 billion euros), an increase of more than fifteen times year-on-year. Samsung’s sales rose by around 23 percent to 74.07 trillion won (around 50 billion euros).

Samsung’s business figures significantly exceeded the expectations of most economists. As the industry leader, the South Korean company was able to benefit from the rapidly rising chip prices triggered by the boom in artificial intelligence. Just a year ago, semiconductor prices were at a relatively low starting level after an oversupply and sluggish demand had long plagued the chip industry.

In particular, Samsung’s business division for so-called HBM chips (High-Bandwidth Memory) developed very robustly, with an increase of over 50 percent compared to the previous quarter. The ultra-high-performance memory chips are used primarily in AI applications.

Optimistic forecast

For the second half of the year, Samsung expects the market share of AI services to continue to grow as companies increase their investments in this area. The electronics group also expects strong demand for HBM chips to continue.

Samsung Electronics’ share price rose by almost 3.6 percent on Wednesday. The South Korean benchmark index KOSPI also closed with a gain of 1.19 percent as a result of the positive business report.

Samsung is the market leader in memory chips and televisions. According to market researchers, the South Korean company also regained the top spot in the smartphone market from Apple in the first quarter.

Just at the beginning of the month, the largest union at Samsung in South Korea called for an indefinite strike. Negotiations for fair wages for the workforce are still ongoing.