Samsung multiplies its operating profit by ten thanks to the

chips

The South Korean company anticipates 4.5 billion quarterly operating profit, 931% more.

Samsung Electronics anticipates strong growth in operating profits for the first quarter thanks mainly to the recovery in the price of memory chips after the collapse of this market. The South Korean manufacturer has beaten the consensus forecasts of analysts after estimating operating profits of 6.6 trillion won, 4.5 billion euros , which represents a growth of 931% compared to the same period of the previous year. The market was expecting a quarterly operating profit of about 5.6 trillion Korean won.

Samsung, which will announce its final results at the end of April, has also benefited from the commercial success of its new family of premium Galaxy S24 mobile phones. The company, which lost global leadership in the smartphone market in the last quarter of 2023 at the hands of Apple, regained the throne in February.

According to data from the consulting firm Counterpoint Research, global sales of the Galaxy 24 family , equipped with AI functions, grew by 8% compared to its predecessor in the first three weeks of availability. For its part, Eugene Investment estimates that the company has raised the average sales price by 30% in the quarter, reaching $340, Reuters reports.

The company, the world’s largest memory chip maker, forecasts revenue growth of 11.4% to 71 trillion Korean won, 48.5 billion euros.

Samsung’s results confirm the recovery of the global memory chip market after the price collapse that began in mid-2022 due to excess post-pandemic inventory and weak demand for technological products. Its competitor SK Hynix has also pointed out in its latest quarterly results the change in the trend of this market.

DRAM memory chip prices have risen 20% in the first quarter compared to the previous quarter, while NAND memory prices have risen between 23% and 28% according to TrendForce.

Samsung has fallen behind its competitor SK Hynx, also South Korean, in the new battle that is opening in the segment of high bandwidth chips (HBM, for its acronym in English) for AI tasks, a market that has exploded thanks to the boom in artificial intelligence. Analysts are confident that Samsung, which expects to launch a new generation of HBM processors in the third quarter, will gradually recover lost ground.

On the other hand, Samsung expands its investment plan in factories in the US . The company plans to more than double the initial investment planned in factories in Texas to $44 billion, WSJ reports.

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