Samsung Says Q1 Operating Profits Soar Nearly Tenfold On-Year

AFP/APP

Seoul: Samsung Electronics said Tuesday that its first-quarter operating profits had risen nearly tenfold year-on-year amid recovering chip prices and growing demand, notably for generative AI.

The firm is the flagship subsidiary of South Korean giant Samsung Group, by far the largest of the family-controlled conglomerates that dominate business in Asia’s fourth-largest economy.

“Operating profit increased to KRW 6.61 trillion ($4.85 billion) as the Memory Business returned to profit by addressing demand for high value-added products,” it said in a statement.

Strong smartphone sales, higher prices for semiconductors plus a focus on high-value-added products including HBM — the high-bandwidth memory used in AI hardware — were key to the strong performance, it said.

“Looking ahead to the second quarter, the industry is expected to remain solid, led mainly by demand for generative AI,” the company added.

The company said sales were up 12.8 percent on-year to 71.9 trillion won.

“Demand for on device AIs and high resolution features continues to drive our production,” said Tommy Kwon, vice president of Samsung’s system LSI business, on an earnings conference call.

The weakness of the Korean won — down nearly seven percent against the US dollar so far this year — “resulted in a positive impact on company-wide operating profit of about KRW 0.3 trillion compared to the previous quarter,” Samsung added.

Samsung’s net profit of 6.75 trillion won exceeded market expectations, which had been estimated at 4.99 trillion won, according to a survey conducted by the financial data firm Yonhap Infomax.