Samsung forecasts major profit jump in second quarter

SEOUL

Samsung Electronics said on July 5 it expects second-quarter operating profits to rise more than 15-fold on-year as chip prices bounce back and demand for generative AI continues to grow.

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.

The world's largest memory chip maker said in a regulatory filing that its April-June operating profits were expected to rise to 10.4 trillion won ($7.54 billion), up from 670 billion won a year earlier.

Sales, meanwhile, are expected to rise 23.3 percent to 74 trillion won, Samsung said.

Semiconductors are the lifeblood of the global economy, used in everything from kitchen appliances and mobile phones to cars and weapons.

And demand for the advanced chips that power AI systems has skyrocketed thanks to the success of ChatGPT and other generative AI products..

Semiconductors are South Korea's leading export and hit $11.7 billion in March, their highest level in almost two years.

The United States in April announced grants of up to $6.4 billion to Samsung to produce cutting-edge chips in Texas.

That same month, industry tracker International Data Corporation (IDC) said Samsung regained its position as the top smartphone seller, wresting back the lead from Apple.

Samsung is set to unveil its latest flagship foldable smartphones, equipped with AI features, along with a range of accessories including a new health-monitoring "smart ring", on July 10 in Paris.