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Samsung Electronics has announced an expected 13-fold increase in its second-quarter profit, a remarkable turnaround compared to the same period last year. The company’s estimated operating profit for Q2 2024 is set to reach 8.8 trillion won ($6.34 billion), up from just 670 billion won in Q2 2023. This marks the highest profit for Samsung since the third quarter of 2022.

A major driver of this profit surge is the improved performance of Samsung’s semiconductor division. This segment has seen a significant recovery, posting an estimated operating profit of 4.6 trillion won in Q2 2024, compared to a loss of 4.36 trillion won in the same period last year. The increased demand for high-end DRAM chips, particularly those used in artificial intelligence (AI) applications, has fueled this growth. Prices for DRAM chips have jumped by 13% to 18%, while NAND Flash chips used for data storage have risen by 15% to 20%.

AI Boom Boosts Chip Demand

The booming AI sector has significantly impacted Samsung’s profits, with a growing need for advanced memory chips like high-bandwidth memory (HBM) solutions used in AI data centers. This trend has led to increased prices and demand for Samsung’s high-end DRAM chips, essential for AI chipsets and data center servers.

Despite the overall profit increase, Samsung’s mobile business has experienced a decline. The estimated Q2 operating profit for this division is 2.2 trillion won, down from 3.04 trillion won a year earlier. The drop is attributed to higher costs for parts and marketing, as well as investments in AI service development. The number of smartphones shipped remains similar to last year, indicating that external factors like increased costs are impacting profits.

Upcoming Product Launches

Samsung is set to launch its latest flagship foldable phones, the Galaxy Z Fold 6 and Galaxy Z Flip 6, along with new mobile accessories on July 10 in Paris. The company is also introducing a new health monitoring ring, aiming to compete with Apple in the high-end market.

Analysts have forecasted Samsung’s Q2 operating profit to be around 8.547 trillion won to 8.8 trillion won. Samsung is expected to release a detailed earnings report at the end of the month. The company’s focus on expanding and diversifying its business divisions, alongside the rising chip prices, suggests a promising future ahead.

Overall, Samsung’s impressive Q2 profit highlights a strong recovery in the chip industry, driven by the surging demand for AI-related memory chips.

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