By Joyce Lee
SEOUL (Reuters) – Samsung Electronics is expected to report a 13-fold increase in second-quarter profit from a year earlier as demand for artificial intelligence technology fuels a recovery in memory chip prices.
Operating profit at the world’s biggest maker of memory chips, smartphones and TVs likely rose to 8.8 trillion won ($6.34 billion) in the quarter ended June 30, according to an LSEG SmartEstimate average of 27 analysts, weighted by those who are most consistent. necessary.
That amount would be Samsung’s biggest profit since the third quarter of 2022. It compares with an operating profit of 670 billion won in the second quarter of last year.
The performance of the tech giant’s main semiconductor division likely continued to improve its second consecutive quarterly profit, as memory chip prices continue to rise from a mid-2022 low through the end of 2023, driven by weak demand post-pandemic for devices that use the chips.
Explosive demand for cutting-edge DRAM chips, such as high-bandwidth memory (HBM) chips used in AI chipsets, as well as chips used in data center servers and devices that run AI services, is underpinning a broad recovery in the chip industry, analysts said.
During the second quarter, memory chip prices rose about 13% to 18% from the previous quarter for DRAM chips used in technology devices and 15% to 20% for NAND Flash chips used for memory storage. data, according to data provider TrendForce.
Samsung’s chip division’s estimated second-quarter operating profit was 4.6 trillion won, according to an average forecast of 10 analysts. This compares to a loss of 4.36 trillion won in the same period last year.
Its mobile business likely saw its second-quarter operating profit decline from last year despite having sold a similar number of smartphones, analysts said, due to higher parts costs and higher marketing and development costs for mobile services. AI.
The mobile business likely reported an operating profit of about 2.2 trillion won, according to an average forecast of 10 analysts, down from a profit of 3.04 trillion won a year ago.
Samsung is expected to compete with rival Apple at the top of the market when it launches its latest foldable phones and mobile accessories, including a new health monitoring ring, on July 10 in Paris.
($1 = 1,387.4200 won)
(Reporting by Joyce Lee; Editing by Miral Fahmy)
