By Joyce Lee
SEOUL (Reuters) – Samsung Electronics (KS:) is expected to post a 13-fold rise in second-quarter profit from a year earlier as demand for artificial intelligence technology drives a recovery in memory chip prices.
Operating profit at the world’s largest 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 the average of an LSEG SmartEstimate of 27 analysts, weighted by those that are more consistent. accurately.
That amount would be Samsung’s highest 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 key semiconductor division continued to improve likely to its second straight quarterly profit as memory chip prices continued to rise from mid-2022 lows to late 2023, driven by weak post-pandemic demand for gadgets using the chips .
Explosive demand for high-end DRAM chips, such as high-bandwidth memory (HBM) chips used in AI chipsets, as well as chips used in data center servers and gadgets that run AI services, are supporting a broad recovery in the chip industry, analysts said.
According to data provider TrendForce, memory chip prices during the second quarter rose about 13% to 18% from the previous quarter for DRAM chips used in tech devices and 15% to 20% for NAND Flash chips used for data storage.
Samsung’s chip division’s estimated operating profit in the second quarter was 4.6 trillion won, according to an average of 10 analyst forecasts. This compares with a loss of 4.36 trillion won over the same period last year.
The mobile business likely saw its second-quarter operating profit shrink from last year despite shipping a similar number of smartphones, analysts said, due to higher parts costs and higher marketing and development costs for AI services.
The mobile sector likely reported an operating profit of about 2.2 trillion won, according to the average forecasts of 10 analysts, compared with a profit of 3.04 trillion won a year ago.
Samsung is expected to compete with rival Apple (NASDAQ:) at the top end of the market when it launches its latest flagship foldable phones and mobile accessories, including a new health monitoring ring, in Paris on July 10.
($1 = 1,387,4200 won)
