Samsung expects to achieve profits of more than 1400% on an annual basis

SEOUL (EFE) – South Korean tech giant Samsung Electronics expects its second-quarter operating profit to rise 1,452 percent year-on-year to 10.4 trillion won (around $7,540 million/€6,970 million) thanks to higher chip prices due to the rise of artificial intelligence (AI), the company said today.

The data, included in the traditional earnings forecast released Friday, is much higher than the expectations of many local analysts, who had expected an operating profit of around 7.5 trillion won (US$5.44 billion).

The price of memories is rising.

This figure – which experts believe is conditioned by the rising prices of Samsung’s DRAM and NAND Flash memory thanks to the momentum gained by artificial intelligence – is in turn 57.33% higher than what was achieved in the January-March period of this year.

According to the forecast for its April-June balance sheet, this will be the first time Samsung Electronics has been able to report an operating profit of more than 10 million won since the third quarter of 2022, and the figure alone will surpass the operating profit that the Suwon-based company (south of Seoul) posted throughout the past fiscal year; 6.5 trillion won (US$4.715 billion).

In addition to its operating profit forecast to more than double 15 times compared to the same period last year, the company expects total sales to reach about 74 trillion won ($53.685 million) in the second quarter of 2024.

This represents an increase of 23.31% compared to the same period last year and 2.89% compared to the first quarter of this year.

Samsung’s strategy increases profits

After a slump in 2023, when slowing demand led Samsung to make inventory adjustments and significant production cuts, the company announced in the first quarter that it expects a strong recovery this year.

As usual, the tech giant did not release a forecast for net profit it expects for the April-June period, nor did it break down its results forecast by division.

Samsung Electronics is scheduled to present the full results sheet in the last week of July.