Samsung Electronics Co yesterday reported its fastest growth since 2010, with operating profits soaring for the second quarter, as chip prices bounce back and demand for generative artificial intelligence (AI) continues to grow.
The world’s largest memorychip maker posted an operating profit of 10.44 trillion won (US$7.6 billion) “as favorable memory market conditions drove higher average sales price” for the April to June period, Samsung said in a statement.
“Robust sales of OLED panels,” used in creating digital displays, had also contributed, the company added.
Photo: AP
The figure is a 1,462.29 percent jump from 670 billion won for the same period a year earlier, exceeding market expectations.
Sales rose 23.4 percent to 74 trillion won, Samsung said.
Samsung is one of only a handful of companies worldwide that manufacture premium high-bandwidth memory (HBM) chips tailored for AI processors.
HBM sales in the second quarter were up 50 percent from the previous quarter, and the company was increasing production capacity, Samsung executive vice president of memory Kim Jae-jun said.
“We have secured nearly four times the volume of customer requests compared with the previous year,” he said.
Samsung said it would “actively respond to the demand for high-value-added products for AI and will expand capacity to increase the portion of HBM3E sales.”
The company’s solid earnings come even as a union representing tens of thousands of its workers is staging an “indefinite” strike in a bid to force management to negotiate on wages and benefits.
Thousands of workers joined the strike at the outset, although it is unclear how many people continue to abstain from working.
Samsung said it was “communicating and discussing to ensure that this labor union strike ends early,” adding that there was “no problem with responding to our customer volume.”
The union said the work stoppage has had a negative impact.
“We’re getting reports from our members that it is affecting production,” National Samsung Electronics Union vice president Lee Hyun-kuk said.
"The reason we are striking is clear, and we just want the company to bring suggestions that respect workers," he added.
Counterpoint associate director Lim Su-jeong said Samsung would likely end this year strong, with an upcoming collaboration with market-leader Nvidia Corp "expected to be approved in the second half of the year."
"Samsung is actively working to ensure that the strike ends early, so we expect there is a low possibility for the strike to grow into serious problems such as production disruptions unless the strike is prolonged," Lim said.
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