Samsung Electronics is set to experience a whopping 15-fold rise in profits in the second quarter of 2024 as compared to the same period in the previous year. This extraordinary growth projection is primarily attributed to the skyrocketing demand for artificial intelligence (AI) chips driven by a general uptrend in advanced chip prices. Amidst this optimistic forecast, Samsung shares surged over 2% during early trading hours in Seoul, showcasing investor confidence in the company’s future prospects.
The South Korean tech giant, known for its dominance in memory chips, smartphones, and televisions, reported an impressive over 10-fold increase in profits in the first quarter of 2024. For the current quarter, Samsung anticipates its profits to reach a staggering 10.4tn won, a significant leap from the 670bn won it earned last year. This impressive figure surpasses the initial analyst estimates of 8.8tn won, highlighting the bullish outlook on Samsung’s performance in the AI-driven market.
Marc Einstein, the chief analyst at ITR Corporation, emphasized the crucial role of AI chip demand in sectors like data centers and smartphones, attributing it to the recent market rally witnessed in global indices like the S&P 500 and the Nasdaq. The surge in market capitalization of chip-making giant Nvidia to over $3tn further underscores the immense growth potential in the AI space, with Samsung poised to benefit significantly from this upward trend.
As the flagship unit of the Samsung Group, Samsung Electronics is gearing up for potential labor unrest as the tech company faces a looming three-day strike initiated by a union of workers starting next week. The workers’ demands for a more transparent bonus structure and improved leave policies highlight the underlying tensions within the conglomerate despite the stellar financial performance expected in the near term.
In conclusion, Samsung’s remarkable profit forecast driven by the AI chip boom signifies a transformative period for the tech giant, positioning it as a major player in the rapidly evolving semiconductor industry. However, ongoing labor disputes and the need for transparent labor practices present potential challenges that Samsung must navigate to sustain its growth trajectory in the long run.
