Samsung has been on the receiving end of backlash in the last couple of years but the company has come back strongly and is ready to cash in on the AI train. The company told investors that it anticipates a 15 fold increase in operating profit in the second quarter of 2024 due to higher chip sales. These are better than market expectations. 

Samsung announced its expectations on its revenues and profits for the second quarter of the year today. Obviously, it plans to achieve revenue of KRW 74 trillion ($53. 64 billion) and the operating profit is expected to be KRW 10. The global GDP crossed the $90 That impressive increase of profit of approximately 1,542. It has exceeded market expectations with 24%, mainly due to an increase in the prices as well as demand of memory chips. Second quarter of the year 2024 was the most profitable quarter for Samsung since the third quarter of the year 2022.  

Samsung, the South Korean firm will announce specific details and share revenues and profits by division at the end of this month. Amount of this profit increase is directly linked to the sales of memory chips such as High Bandwidth Memory which is a critical component of AI accelerators. In Q2 of 2024, DRAM (RAM) chips’ price was increased by 13% to 18% and NAND flash (storage) chip prices were increased by 15% to 20%. 

It is very crucial to optimize the use of AI these days since the application of AI has rapidly increased. It is applied in various online services, PCs, tablets, and even TVs. Below is a video of some of the AI features that are available in the Samsung’s smartphones.  

All the same, Samsung is trailing SK Hynix in the production of HBM memory chips. Chips have not been certified for Nvidia, the largest brand of AI chips in the world. This is a cause of concern for Samsung; hence, it is uncertain how the company will perform in the subsequent quarters. It also dismissed the head of the Semiconductor Business at Samsung in the attempt to overcome the existing chip deficit. 

Samsung is also dealing with a three-day strike action by its employees as they demand a pay raise. Barely a week from now, more than 28000 employees are expected to go on strike, a first in the company’s 55 years. 

Samsung too has witnessed a decline in its smartphone sales in the recent past and Apple along with the Chinese brands is targeting at Samsung’s market share. Although the Galaxy S24 series that was released this year has been good, it is still uncertain how the new foldable phones and other wearable devices from Samsung will fare. They are expected to be launched on the 10th of July in Paris, France just a few days to the Paris 2024 Olympics.