image source, Getty Images
- Author, Mariko oy
- Role, Business Correspondent – BBC
Samsung Electronics announced that it expects its profits for the first three months of 2024 to jump more than 10 times, compared to the previous year.
This comes as chip prices recover from the recession that followed the pandemic, and demand for artificial intelligence-related products booms.
Samsung, based in South Korea, is the largest maker of memory chips, smartphones and televisions in the world.
The company is scheduled to issue a detailed financial report on April 30.
The technology giant estimated that its operating profit rose to 6.6 trillion won ($4.9 billion) in the January-March quarter, an increase of 931 percent from the same period in 2023. This exceeded analysts’ expectations by about 5.7 percent. One trillion won.
Its profits are expected to be boosted by a recovery in semiconductor prices in the global market, after a sharp decline in the previous year.
It is estimated that global memory chip prices rose by about a fifth last year.
Samsung’s semiconductor division is usually the company’s largest source of revenue.
Demand for semiconductors is also expected to remain strong this year, thanks to the boom in artificial intelligence technologies.
The earthquake that struck Taiwan on April 3 could reduce the global supply of chips, which could allow Samsung to raise prices further.
Taiwan is home to several major chip manufacturers, including TSMC – a supplier to Apple and NVIDIA.
While TSMC said the earthquake did not have a major impact on its production, it experienced some disruption to its operations.
Samsung is also expected to receive a boost from sales of its new flagship smartphones, the Galaxy S24, which was launched last January.
Taiwan witnessed an earthquake on Wednesday, with a magnitude of 7.4, the strongest in 25 years, the island.
Buildings in the capital, Taipei, and its surrounding areas shook violently, and it was feared that dozens were trapped under the rubble in the city of Hualien, near the epicenter.
Advanced chips are used to power supercomputers, artificial intelligence equipment and military equipment.
The United States seeks to limit China’s ability to obtain electronic chips, which are considered an essential component of all electronic devices, from smartphones to weapons and military equipment.
In October 2022, Washington announced some of the broadest export restrictions yet, making companies intending to export these chips to China required to obtain export licenses.
The restrictions included chips produced using U.S. computer equipment or software regardless of where in the world they were made.
The restrictions also prevent US citizens and green card holders from working for some Chinese chip companies. Green card holders are permanent residents of the United States and have the right to work in the country.
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