Samsung Electronics Reports 932.8% Surge in Q1 2024 Operating Profit

Samsung Electronics reported a noteworthy 932.8% increase in its first-quarter 2024 operating profit, reaching 6.61 trillion won ($4.8 billion), driven by a rebound in memory chip prices and optimism around the growing demand for artificial intelligence (AI) technologies. The company's revenue also rose by 12.81% to 71.92 trillion won during the same period.

The memory chip segment, a cornerstone of Samsung's profitability, rebounded strongly, reporting a profit of 1.91 trillion won in the March quarter, in contrast to the 4.58 trillion won loss recorded a year earlier. This resurgence was attributed to strategic customer investments in anticipation of future price hikes, particularly in NAND flash and DRAM chips.

Samsung also announced the commencement of mass production for its latest high bandwidth memory (HBM) chips, the 8-layer HBM3E, tailored for generative AI chipsets, and plans to initiate production of the 12-layer version during the second quarter. The company expects continued strong demand for memory chips, especially high bandwidth-memory (HBM) for AI servers and storage.

Why this matters: Samsung's strong performance highlights the growing importance of advanced memory chips in the rapidly expanding field of artificial intelligence. As AI technologies progress and become more widely adopted, the demand for high-performance memory solutions is expected to surge, positioning Samsung as a key player in this impactful industry.

Despite the impressive performance, Samsung's mobile devices business faced headwinds, with a first-quarter operating profit of 3.51 trillion won, down from 3.94 trillion won a year earlier, due to escalating costs, including elevated memory chip prices.

However, the company's flagship Galaxy S24 smartphones, featuring generative AI capabilities, have been well-received by consumers, with 50% of customers citing AI as a reason for purchase and 60% regularly using the AI functions.

Looking ahead, Samsung remains optimistic about the industry's performance, anticipating continued strong demand driven by the escalating need for generative AI technologies. "The memory chip market is expected to remain strong, driven by the growing demand for AI chips, including our latest 8-layer HBM3E and upcoming 12-layer versions," a Samsung spokesperson stated. The company plans to further leverage AI across its entire range of mobile devices, including tablets and wearables, to maintain its competitive edge in the evolving technology landscape.

Key Takeaways

• Samsung's Q1 2024 operating profit surged 932.8% to 6.61 trillion won ($4.8B).
• Memory chip segment rebounded strongly, reporting 1.91 trillion won profit.
• Samsung commenced mass production of 8-layer HBM3E chips for generative AI.
• Galaxy S24 smartphones with generative AI features were well-received by consumers.
• Samsung expects continued strong demand for memory chips, especially HBM for AI.