Samsung expects strong AI demand to boost tech sales in coming year

Samsung Electronics, the South Korean tech giant, anticipates robust demand for artificial intelligence (AI) in the latter half of 2024.

The surge in demand is expected to drive sales of memory chips and other tech devices. The company reported a tenfold increase in first-quarter operating profit.

During Q1, Samsung's memory chip sales nearly doubled compared to the previous year. The steep price rise was fueled by the AI boom. Looking ahead, the company remains optimistic about business conditions in the second half, particularly in the realm of generative AI. Despite ongoing volatility related to macroeconomic trends and geopolitical issues, Samsung foresees a continued surge in AI-related demand.

In terms of financials, Samsung's operating profit for January to March reached 6.6 trillion won (approximately $4.8 billion), a significant jump from the previous year's 640 billion won. This aligns with the company's earlier estimate and marks the highest operating profit since Q3 2022. The recovery is especially noteworthy, considering the challenging memory chip downturn caused by weakened post-pandemic gadget demand.

The chip division, which historically contributed two-thirds of Samsung's operating profit, swung from a 4.58 trillion won loss in the previous year's March quarter to a profit of 1.91 trillion won.

Moreover, first-quarter revenue increased by 13% to 71.9 trillion won, with memory chip revenue alone experiencing a remarkable 96% surge to 17.49 trillion won.