Samsung Electronics estimated Friday a 15-fold rise in Q2 operating profit due to rebounding semiconductor prices from the AI boom.
Samsung, the top memory chip, smartphone, and TV maker, reported Q2 operating profit surged to 10.4 trillion won ($7.54 billion).
The profit exceeded the 8.8 trillion won LSEG SmartEstimate, marking its best quarter since Q3 2022.
Moreover, analysts said Samsung’s profit exceeded expectations due to higher chip prices and reversing previous inventory writedowns.
Samsung said revenue likely rose 23% to 74 trillion won in the second quarter, compared to the previous year.
Samsung shares rose 1.2% after the guidance, compared to the wider market’s 0.4% increase.
The company plans to report detailed second-quarter earnings on July 31.
Samsung’s semiconductor division likely saw a second straight quarterly profit as memory chip prices rise, reversing the post-pandemic slump.
Surging demand for high-end DRAM chips, including AI-related HBM and data center chips, has boosted prices, analysts noted.
In the second quarter, prices for DRAM chips rose 13% to 18%, and NAND Flash chips increased 15% to 20%, reported TrendForce.
However, TrendForce predicts a 5% to 10% price increase for conventional DRAM and NAND Flash chips in Q3, despite sluggish demand for older electronics chips.
“At the earnings call at the end of the month, we will be interested in Samsung’s outlook on legacy chips, which will be a sign whether this chip industry recovery can last into next year,” said Ko Yeongmin, an analyst at Daol Investment and Securities.
Analysts predict AI’s demand for high-end chips like HBM and SSDs will excel, with Samsung trailing SK Hynix in HBM supply to customers like Nvidia.
Micron Technology exceeded revenue expectations due to AI industry demand, but disappointed with its next-quarter forecast.
Investors await approval for Samsung’s fourth-gen HBM chips to supply Nvidia, following earlier test failures on heat and power.
In May, Samsung replaced its semiconductor division chief to address a “chip crisis” it identified.
As of Thursday, Samsung shares were up 8% year to date, while SK Hynix shares had risen 63%.
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