The Samsung brand is displayed on the firm’s Seocho constructing in Seoul on July 31, 2024. Samsung Electronics reported on July 31 its quickest development since 2010, with working earnings hovering for the second quarter, as chip costs bounce again and demand for generative AI continues to develop. (Picture by ANTHONY WALLACE / AFP)
Seoul, South Korea — Samsung Electronics Wednesday reported its quickest development since 2010, with working earnings hovering for the second quarter, as chip costs bounce again and demand for generative AI continues to develop.
The world’s largest reminiscence chip maker posted an working revenue of 10.44 trillion received ($7.5 billion) “as beneficial reminiscence market circumstances drove increased common gross sales worth” for the April to June interval, it stated in a press release.
It added that “strong gross sales of OLED panels”, utilized in creating digital shows, had additionally contributed.
The determine is a 1,462.29 p.c bounce from 670 billion received for a similar interval a yr earlier, exceeding market expectations.
READ: South Korea Samsung union declares ‘indefinite’ strike
Gross sales rose 23.4 p.c to 74 trillion received, Samsung stated.
The agency is the flagship subsidiary of South Korean large Samsung Group, by far the most important of the family-controlled conglomerates that dominate enterprise in Asia’s fourth-largest economic system.
Semiconductors are the lifeblood of the worldwide economic system, utilized in every part from kitchen home equipment and cell phones to automobiles and weapons.
And demand for the superior chips that energy AI techniques has skyrocketed due to the success of ChatGPT and different generative AI merchandise.
Samsung is one among solely a handful of corporations worldwide that manufacture premium high-bandwidth reminiscence (HBM) chips tailor-made for synthetic intelligence processors.
READ: Samsung Electronics forecasts main Q2 revenue bounce
Kim Jae-jun, government vice chairman of reminiscence, advised reporters HBM gross sales had been up 50 p.c within the second quarter in contrast with the three months prior — and the corporate was rising manufacturing capability.
“We now have secured almost 4 occasions the amount of buyer requests in comparison with the earlier yr,” he stated.
Samsung stated in a press release it might “actively reply to the demand for high-value-added merchandise for AI and can broaden capability to extend the portion of HBM3E gross sales.”
Earlier this month, the corporate showcased the deployment of AI throughout a spread of its shopper digital merchandise — together with high-end well being wearables — because it seeks to increase its management in world smartphone gross sales.
“Samsung Electronics’ excessive credit score high quality is supported by its strong earnings this yr which might be pushed by an upswing within the reminiscence chip cycle,” stated Gloria Tsuen of Moody’s Rankings.
“The corporate’s AI chip growth and strengthening foundry enterprise will likely be key to its technological management and earnings over the subsequent 12-18 months,” she added.
Semiconductors, strikes
Semiconductors are South Korea’s main export and $13.4 billion value had been shipped in June, their highest stage but, accounting for a fifth of the nation’s whole exports, in response to figures launched by the customs service.
In April, america introduced grants of as much as $6.4 billion to Samsung to supply cutting-edge chips in Texas.
That very same month, trade tracker Worldwide Knowledge Company stated Samsung regained its place as the highest smartphone vendor, wresting again the lead from Apple.
Samsung’s strong earnings come at the same time as a union representing tens of 1000’s of employees at Samsung Electronics is staging an “indefinite” strike in a bid to drive administration to barter on wages and advantages.
Hundreds of employees joined the strike on the outset, though it’s unclear how many individuals proceed to abstain from working.
Samsung stated Wednesday it was “speaking and discussing to make sure that this labour union strike ends early,” including there was “no drawback with responding to our buyer quantity”.
However the union claims the work stoppage has had a damaging impression.
“We’re getting experiences from our members that it’s affecting manufacturing,” Lee Hyun-kuk, vice chairman of the Nationwide Samsung Electronics Union, advised AFP.
“The rationale we’re putting is evident, and we simply need the corporate to convey strategies that respect employees,” he added.
Samsung shares had been up 1.2 p.c in morning commerce in Seoul.
Lim Su-jeong, affiliate director at Counterpoint stated Samsung would possible finish 2024 sturdy, with an upcoming collaboration with market-leader Nvidia “anticipated to be authorised within the second half of the yr.”
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“Samsung is actively working to make sure that the strike ends early, so we count on there’s a low chance for the strike to develop into severe issues comparable to manufacturing disruptions except the strike is extended,” Lim stated.
