The Samsung emblem is on show at their pavilion throughout the Cellular World Congress in Barcelona, Spain, on February 28, 2024. (Photograph by Joan Cros/NurPhoto through Getty Photos)
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Samsung Electronics on Wednesday reported higher-than-expected second-quarter income and working revenue, as demand for its superior reminiscence chips which might be essential for synthetic intelligence coaching remained sturdy.
Listed below are Samsung’s second-quarter outcomes versus analysts’ common estimates based on LSEG.
- Income: 74.07 trillion Korean received (about $53.45 billion) vs. 73.74 trillion Korean received
- Working revenue: 10.44 trillion Korean received vs 9.53 trillion Korean received
Samsung’s income for the quarter ended June jumped 23.42% from a yr earlier, whereas working revenue soared 1,458.2%.
The South Korean big mentioned sturdy demand for high-bandwidth in addition to standard reminiscence, comparable to dynamic random entry reminiscence, from prospects increasing AI investments contributed to the sturdy efficiency.
For the second half, Samsung mentioned it expects the demand from server AI to remain sturdy throughout server merchandise together with HBM and SSD. The agency added that increasing capability to fulfill demand for HBM and server DRAM may additional constrain provide of standard reminiscence chips.
SDD, or solid-state drive, refers to a semiconductor-based storage system present in computer systems.
Samsung’s shares rose as a lot as 1.35% Wednesday morning.
Reminiscence momentum
HBM reminiscence chips are essential for AI chips – which have seen an enormous demand enabled by the AI growth. This has largely benefitted corporations such Samsung Electronics and SK Hynix, the highest two reminiscence chipmakers on the earth.
“With reminiscence’s common promoting costs anticipated to proceed their uptrend for subsequent a number of quarters we foresee a quarterly sequential revenue development for Samsung Electronics till 2025,” CLSA mentioned in a report earlier this month following Samsung’s second-quarter forecasts.
“After Nvidia and international chip makers introduced an AI semiconductor roadmap lately, we foresee a reminiscence value hike development till 1H25. We attribute this to better issues about reminiscence provide amid sturdy demand for HBM and excessive density enterprise SSD, which use extra wafers, with elevated manufacturing lead time,” SK Kim of Daiwa Capital Markets mentioned in a report final month.
Enterprise for the world’s largest reminiscence chip maker rebounded as reminiscence chip costs recovered on AI optimism final yr. The South Korean electronics big noticed report losses in 2023 because the business reeled from a post-Covid stoop in demand for reminiscence chips and electronics.
Weaker smartphone demand
Smartphone gross sales declined within the second quarter largely due to the “base impact of launches of latest fashions” within the first quarter. Nevertheless, the Galaxy S24 sequence continued to see sturdy demand, Samsung mentioned.
“Smartphone demand decreased sequentially within the seasonally weak quarter, significantly within the premium phase,” the corporate mentioned, including that it expects the premium phase to develop within the second half although the mass phase would possible see a slowdown.
Profitability within the smartphone enterprise additionally dropped as costs of key parts rose.
The agency plans to proceed pushing its premium Galaxy AI merchandise. In its newest transfer, Samsung introduced final week international availability for its latest Galaxy units together with Galaxy Z Fold6, Z Flip6, Watch Extremely and Ring.
Counterpoint Analysis mentioned Samsung ought to see “better uptick to its operational efficiency” within the second half, primarily pushed by reminiscence chips and a “premiumisation” development of smartphones.
“SK Hynix and Micron although will proceed to problem Samsung in reminiscence each within the AI phase with HBM development and within the AI smartphone and PC market as nicely with shut tie-ups and optimizations with key compute gamers comparable to Qualcomm, Intel and Nvidia,” Neil Shah, analysis vp at Counterpoint Analysis, mentioned in emailed feedback to CNBC.
That is breaking information. Please examine again for updates.