Samsung Electronics’ Q2 Operating Profits Soar to $7.5 Billion

AFP/APP

Seoul: Samsung Electronics reported a remarkable 15-fold increase in operating profits for the second quarter, reaching $7.5 billion. This surge is attributed to the rebound in chip prices and the growing demand for generative AI technologies.

The world’s largest memory chip maker achieved an operating profit of 10.44 trillion Korean won, driven by favorable memory market conditions that resulted in higher average sales prices. Robust sales of OLED panels also contributed to this impressive result.

The operating profit represents a 1,462.29 percent increase from the 670 billion won reported in the same period last year, surpassing market expectations. Sales climbed 23.4 percent to 74 trillion won.

As the flagship subsidiary of South Korean conglomerate Samsung Group, Samsung Electronics is a major player in the global economy. Semiconductors, essential for various applications from kitchen appliances to advanced AI systems, are a key component of this economy. Demand for advanced chips, particularly those powering AI systems, has surged with the success of generative AI products like ChatGPT.

Samsung is one of the few companies worldwide producing premium high-bandwidth memory (HBM) chips for AI processors. The company plans to expand its HBM3E production to meet the growing demand for high-value-added AI products.

Earlier this month, Samsung demonstrated the integration of AI across its consumer electronics, including high-end health wearables, and aims to maintain its leadership in global smartphone sales. Semiconductors are South Korea’s top export, reaching $13.4 billion in June, accounting for a fifth of the country’s total exports.

In April, the U.S. announced up to $6.4 billion in grants for Samsung to produce cutting-edge chips in Texas. That same month, Samsung regained its position as the top smartphone seller from Apple, according to industry tracker International Data Corporation (IDC).

Despite strong earnings, Samsung faces a significant challenge with an ongoing “indefinite” strike by a union representing tens of thousands of workers. The strike aims to push management to address issues related to wages and benefits. The impact on production is uncertain, but Samsung assures that it will prevent disruptions.

Samsung shares were up 1.2 percent in morning trade in Seoul.