South Korean electronics giant Samsung announced a significant rise in its net profit in Q1 2024 on Tuesday, as the demand for hardware to power artificial intelligence (AI) technologies is causing a boom in its memory chip business.
Memory chips, particularly high-bandwidth memory, are becoming vital for AI accelerators, and Samsung appears to be capitalizing on this trend.
The Q1 Samsung earnings report revealed a four-fold rise in net profit, up to 6.755 trillion won ($4.91 billion), up from 1.575 trillion won during the same period last year. Samsung’s quarterly revenue also rose by 13% to 71.916 trillion won.
Samsung's smartphone business also remains robust, bolstered by the release of its new Galaxy S24 during the quarter — the phone boasts innovative AI-powered features such as live translation during phone calls across 13 languages and 17 dialects.
This launch helped Samsung surpass Apple Inc. to become the world's largest smartphone manufacturer by shipments in the first quarter, as reported by market research firm IDC.
Samsung anticipates continued strong demand for high-bandwidth memory chips well into the second half of 2024.
The company is set to expand its production capabilities, planning to mass-produce new 12-stack HBM3E products starting in the second quarter, building on its eight-stack HBM3E production that began in April. The South Korean tech giant also secured a grant from the U.S. Commerce Department's Chips Act, which will support over $40 billion in manufacturing investments in Texas.
Samsung is competing with rivals such as South Korea's SK Hynix and U.S. based Micron Technology in the memory-chip market. SK Hynix stock closed 0.97% down on Tuesday at 174,200 won, while Micron Technology shares were trading slightly lower in premarket hours at $114.15.
Samsung shares trading on the Korea Exchange booked a 1% gain as of market close on Tuesday. Samsung stock is down close to 1.3% year-to-date but remains up 18% on a 12-month basis.
Samsung Electronics global depositary receipts (GDRs) trading in London were last up 1.8%.
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