Samsung predicts 10-fold increase in profits as AI boom sees chip prices recover
By Louis Goss
Samsung Electronics said it expects to post a 10-fold increase in its first quarter profits, compared to a year ago, in what would be a significant turnaround for the Korean firm following a major rebound in the price of microchips driven by the artificial intelligence (AI) boom.
In a preliminary statement, Samsung Electronics said Friday it expects to see its operating profits increase by 931% from ?640 billion ($473.5 million) in the first quarter of 2023 to ?6.6 trillion in the first quarter of 2024. Samsung is set to post its full financial statements later this month.
The increase would see Samsung post its best set of results since the third quarter of 2022 and mark a major recovery in the Korean firm's fortunes in the wake of a series of underwhelming results driven by significant losses from its chipmaking business over the past year.
Shares in Samsung Electronics (KR:005930) fell 1% on Friday in-line with a wider dip in Korean stocks that also saw the Korea Composite Stock Price Index (KOSPI) KR:180721 fall 1%. Samsung shares have gained 30% over the previous 12 months.
The Korean technology company, which is currently the world's largest producer of memory chips, has suffered over the previous year as low demand for microchips - driven by a slump in demand for consumer electronics - has hit its flagship semiconductor business.
More recently, surging demand for microchips for use in AI tools has seen semiconductor prices recover from long-time lows that saw Samsung post its weakest set of quarterly results in 14-years during the middle of 2022.
Earlier this week, JP Morgan lifted its forecasts for Samsung Electronics, in predicting the company's profits will have been lifted in the first quarter by recovering demand for memory chips and the resulting price increases.
-Louis Goss
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
04-05-24 0514ET
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