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Samsung Electronics announced impressive second-quarter financial results, surpassing analyst expectations with substantial revenue and operating profit growth, driven largely by surging demand for AI-related memory chips.
For the quarter ending June, Samsung reported revenue of 74.07 trillion Korean won (approximately $53.45 billion), exceeding the forecast of 73.74 trillion Korean won. The company’s operating profit surged to 10.44 trillion Korean won, significantly higher than the anticipated 9.53 trillion Korean won and representing a staggering 1,458.2% increase from the previous year.
The dramatic increase in profit was fueled by strong demand for high-bandwidth memory (HBM) and conventional memory types, including dynamic random access memory (DRAM), due to growing investments in artificial intelligence. Samsung’s robust performance was bolstered by its strategic focus on expanding capacity for HBM and server DRAM to meet the ongoing AI boom.
Looking ahead, Samsung anticipates continued strong demand for AI memory products throughout the second half of the year. The company plans to address this by ramping up production of its latest AI memory product, the HBM3E, and expanding sales of SSDs, which are also in high demand for AI servers.
In addition to its financial performance, Samsung announced a dividend payout of 361 won per common and preferred share for the second quarter, with a total distribution of approximately 2.45 trillion won expected by the end of August. Following the announcement, Samsung shares rose by up to 1.35%.
The memory chip market has seen a significant rebound, with prices recovering from last year’s slump. This resurgence is driven by heightened optimism in the AI sector. Analysts predict that memory prices will continue to rise, contributing to ongoing profit growth for Samsung through at least 2025.
Despite strong performance in memory chips, Samsung faced challenges in its smartphone division. Smartphone sales declined due to the base effect of new model launches earlier in the year, and profitability in this segment fell as component costs increased. However, the Galaxy S24 series continued to see robust demand, particularly in the premium segment.
Samsung remains committed to enhancing its premium Galaxy AI products and investing in long-term growth despite market challenges. The company recently launched new Galaxy devices, including the Galaxy Z Fold6, Z Flip6, Watch Ultra, and Ring.
Looking forward, analysts expect Samsung to benefit from a continued focus on memory chips and a trend toward premium smartphone offerings, while facing competition from key players like SK Hynix and Micron in the AI and memory markets.