By Joyce Lee and Heekyong Yang
SEOUL (Reuters) -Samsung Electronics said on Tuesday it expected demand for artificial intelligence to hold strong in the second half, driving sales of memory chips and tech devices, as it reported a more than 10-fold rise in first-quarter operating profit.
The South Korean company’s memory chip sales nearly doubled in the first quarter from a year earlier as prices rose steeply from a severe downturn, thanks to the boom in AI.
“In the second half of 2024, business conditions are expected to remain positive with demand – mainly around generative AI – holding strong, despite continued volatility relating to macroeconomic trends and geopolitical issues,” Samsung said in a statement.
The world’s biggest maker of memory chips and TVs said operating profit rose to 6.6 trillion won ($4.8 billion) in January-March, up from 640 billion won a year earlier.
That was in line with Samsung’s own estimate of 6.6 trillion won flagged earlier this month, its highest operating profit since the third quarter of 2022.
It cemented a recovery from an unprecedented memory chip downturn caused by weak post-pandemic demand for gadgets that use chips.
The chip division, historically Samsung’s cash cow business that used to make up two-thirds of the company’s operating profit, swung to profit of 1.91 trillion won in the March quarter from a 4.58 trillion won loss a year earlier.
First-quarter revenue rose 13% to 71.9 trillion won, the company said, including a 96% increase in memory chip revenue to 17.49 trillion won.
($1 = 1,374.1900 won)
(Reporting by Joyce Lee and Heekyong Yang; Editing by Jamie Freed)
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