Samsung Electronics on Tuesday reported a 10-fold increase in operating profit for the last quarter as the expansion of artificial intelligence technologies drives a rebound in the markets for computer memory chips.
The South Korean semiconductor and smartphone giant said its operating profit for the January-March quarter came in at 6.6 trillion won ($4.8 billion), up from the 640 billion won ($465 million) it earned during the same period last year.
Revenue rose by nearly 13 percent to 71.9 trillion won ($52 billion), driven by higher prices for memory chips and robust sales of its flagship Galaxy S24 smartphones, the company said.
The company earned 1.91 trillion won ($1.38 billion) in operating profit from its semiconductor business, marking the division’s first quarterly profit since the fourth quarter of 2022, as the chip market continues to recover from a cyclical slump deepened by the COVID-19 pandemic and global trade tensions.
Samsung projected the memory chip market to remain strong in the coming months, driven by the expansion of generative AI technologies, which is increasing the demand for both conventional chips used in servers and advanced chips designed to process AI, including high-bandwidth memory, or HBM.
Responding to higher demands for AI chips, Samsung said it started this month the mass production of its latest HBM chips, called 8-layer HBM3E, and that it plans to start producing the 12-layer version of the chips during the second quarter.
“In the second half of 2024, business conditions are expected to remain positive with demand — mainly around generative AI — holding strong, despite continued volatility relating to macroeconomic trends and geopolitical issues,” Samsung said in a statement.
For smartphones, the company will continue to focus on boosting the sales of its flagship device, Galaxy S24, which is built with an array of new features enabled by AI, including live translation during phone calls in 13 languages and 17 dialects.
Samsung said it plans to expand AI features beyond the S24 to other mobile devices as it expects the technologies to drive growth in the smartphone market in coming months amid improvements in global consumer spending.