Samsung Electronics revealed Tuesday that its first-quarter earnings reached unprecedented levels, climbing more than eight times higher than the same period last year as artificial intelligence technology continues reshaping the semiconductor industry.
The South Korean technology giant anticipates operating profits of 57.2 trillion won (equivalent to $37.92 billion) during the first three months of 2024, significantly exceeding analyst predictions of 40.6 trillion won. This represents a dramatic increase from the 6.69 trillion won recorded in the first quarter of 2023.
These preliminary figures nearly tripled Samsung’s previous quarterly profit record of 20 trillion won, which was achieved in the final quarter of last year.
The company has positioned itself as a primary winner in the artificial intelligence data center expansion, which has created supply constraints for conventional chips used in mobile devices, computers, and gaming systems. This shortage contributed to chip prices nearly doubling during the first quarter alone.
Industry analysts at TrendForce anticipate that contract DRAM memory chip costs will surge by more than 50% in the current quarter as supply shortages continue.
Approximately one year ago, Samsung’s chief executive issued an apology regarding the company’s underwhelming financial performance and stock value, following the firm’s delayed entry into producing high bandwidth memory chips essential for Nvidia’s artificial intelligence processors.
However, Samsung has been closing the competitive gap with South Korean competitor SK Hynix through its newest HBM4 chip technology, while simultaneously capitalizing on the recovery in standard chip demand powered by AI inference capabilities that enable platforms like ChatGPT to provide instant responses.
In March, American memory chip manufacturer Micron Technology projected third-quarter revenues exceeding Wall Street forecasts after achieving record-breaking second-quarter results due to strong AI demand and limited supply availability.
Samsung indicated that its revenue is projected to increase 68% to reach 133 trillion won during the January through March timeframe.
