AI boom likely drove a 13-fold increase in Samsung's Q2 profit

Samsung Electronics Prepares for Impressive Q2 Profit Surge

Samsung Electronics is projected to reveal a significant rise in second-quarter profits, with a 13-fold increase compared to the same period last year, as demand for artificial intelligence (AI) technology drives up memory chip prices. The company's operating profit for the quarter, which ended on June 30, is estimated to have increased to 8.8 trillion won ($6.34 billion), based on data gathered from 27 analysts. If accurate, this would mark Samsung's highest profit since Q3 2022, a sharp increase from the 670 billion won operating profit recorded in Q2 last year.

Key Semiconductor Division Performance

Samsung's semiconductor division, crucial to its profitability, likely continued to show improvement with a second straight quarterly profit. The rise in memory chip prices has played a vital role in this recovery, following a slump induced by dwindling post-pandemic demand for tech gadgets. Analysts attribute the upsurge in demand to high-end DRAM chips, particularly those used in AI applications, data center servers, and devices running AI services, which indicates a broader recovery in the chip industry.

During Q2, DRAM chip prices surged between 13% and 18%, while NAND Flash chip prices increased from 15% to 20% compared to the previous quarter, according to TrendForce. The semiconductor division's operating profit is forecasted at around 4.6 trillion won, based on an average of 10 analysts' estimates, contrasting with a loss of 4.36 trillion won during the same period last year.

Mobile Business Challenges

Conversely, Samsung's mobile business might face a decrease in its operating profit despite maintaining similar smartphone shipment volumes from the previous year. This drop is primarily due to higher costs for parts and increased spending on marketing and AI service development. Analysts predict the mobile division's Q2 operating profit to hover around 2.2 trillion won, a decline from 3.04 trillion won a year ago.

Upcoming Product Launch

Samsung is set to challenge Apple in the high-end market segment as it prepares to launch its latest flagship foldable phones and various mobile accessories, including an innovative health-monitoring ring, on July 10 in Paris. This move is seen as an effort to bolster its competitive edge and maintain its position in the high-stakes mobile technology arena.