Samsung Electronics Co. Galaxy S24 smartphones throughout a media preview occasion in Seoul, South Korea, on Monday, Jan. 15, 2024. Samsung, the world’s most prolific smartphone maker, is leaning into synthetic intelligence as the important thing to unlocking better gross sales this 12 months. Photographer: SeongJoon Cho/Bloomberg by way of Getty Photographs
SeongJoon Cho | Bloomberg | Getty Photographs
Samsung Electronics on Tuesday mentioned working revenue for the primary quarter jumped 932.8% as reminiscence chip costs rebounded on the again of AI optimism.
Listed below are Samsung’s first-quarter outcomes versus LSEG estimates:
- Income: 71.92 trillion Korean gained (about $52.3 billion), vs. 71.04 trillion Korean gained
- Working revenue: 6.61 trillion Korean gained, vs. 5.94 trillion Korean gained
Samsung’s income for the quarter ending March jumped 12.81% from a 12 months in the past, whereas working revenue soared 932.8% in the identical interval.
The figures had been according to the corporate’s steerage earlier this month, the place Samsung mentioned working revenue within the January-March quarter seemingly rose to six.6 trillion Korean gained, up 931% from a 12 months in the past. The agency anticipated first quarter income at 71 trillion gained.
The South Korean electronics big noticed file losses in 2023 because the trade reeled from a post-Covid hunch in demand.
“The corporate posted KRW 71.92 trillion in consolidated income on the again of sturdy gross sales of flagship Galaxy S24 smartphones and better costs for reminiscence semiconductors. Working revenue elevated to KRW 6.61 trillion because the Reminiscence Enterprise returned to revenue by addressing demand for prime value-added merchandise,” Samsung Electronics mentioned in an announcement on Tuesday.
Samsung is the world’s largest producer of dynamic random-access reminiscence chips (DRAM), that are generally present in a variety of client units together with smartphones and computer systems.
“We assume the earnings shock was pushed by increased reminiscence worth hike on AI-driven sturdy upturn cycle. We anticipate the corporate will information for constructive reminiscence market outlook and emphasize its readiness in AI period together with HBM (12H HBM3E, HBM4) and foundry/packaging answer,” mentioned SK Kim of Daiwa Capital Markets in emailed feedback to CNBC on Monday, forward of the earnings launch.
As AI fashions turn out to be extra advanced and datasets turn out to be bigger, these fashions want reminiscence chips with increased capacities and sooner speeds to cater to those workloads.
Kim mentioned in an April 5 report he expects one other worth hike on reminiscence chips to drive Samsung’s second-quarter earnings on the again of an AI increase and the earthquake in Taiwan.
“Particularly, we count on extra upside in costs ensuing from the earthquake in Taiwan,” mentioned Kim, including that the earthquake in early April briefly impacted TSMC‘s and Micron‘s manufacturing.
Citi analysts mentioned they see upside for Samsung’s NAND flash reminiscence enterprise because of AI computing demand. In a notice on April 5, they reiterated their “purchase” score on the agency with a goal worth of 120,000 gained — a 56% upside from the closing worth of 76,700 gained on Monday.
NAND is one other staple reminiscence chip alongside DRAM.
“We count on storage (HDD) to be the subsequent bottleneck in AI computing, particularly in AI coaching, and foresee Samsung Electronics to be one of many key beneficiaries of SSD demand momentum for AI coaching,” mentioned the Citi analysts.
Rising competitors
Many nations on the planet are racing to fabricate superior semiconductors.
Earlier this month, the Biden administration agreed to grant Samsung as much as $6.4 billion of funding to create new manufacturing capability to provide chips in Texas. Micron and TSMC are additionally poised to obtain grants to spice up chipmaking within the U.S. after a long time of chip manufacturing shifting to Asia.
Samsung and TSMC are set to face competitors from Japan’s Rapidus Company, which was just lately granted $3.89 billion in extra subsidies from the Japanese authorities to mass produce 2-nanometer chips from 2027.
There are rising considerations that Samsung Electronics dangers dropping its main place to rivals like SK Hynix, the world’s no. 2 reminiscence chip maker.
SK Hynix on March 19 mentioned it turned the primary within the trade to mass produce HBM3E, the next-generation of excessive bandwidth reminiscence chips utilized in AI chipsets. SK Hynix is the first provider of HBM3 chips to Nvidia’s AI chipsets.
Mehdi Hosseini, senior tech {hardware} analyst of Susquehanna Worldwide Group, identified in early April that Samsung was once the market chief in reminiscence, smartphones and show improvements.
Now, Samsung is simply “benefiting from the cycle restoration,” he added.
Within the first quarter, Samsung managed to regain the highest spot in smartphone shipments after dropping the crown to Apple in 2023, in keeping with Worldwide Knowledge Corp.
