Samsung forecasts record quarterly profit as AI chip demand grows

In short: Samsung says it expects record operating profit for April to June as AI-related demand keeps memory chip prices high.

What's going on

Samsung Electronics forecast that its operating profit rose about 19 times from a year earlier, reaching a record level for the April to June quarter. The company put operating profit at 89.4 trillion won, about $58.4bn. That was slightly above analysts’ expectations of 87.3 trillion won, based on LSEG SmartEstimate.

Samsung also estimated sales of 171 trillion won for the quarter, which would be more than double the same period last year. The company said the main driver was high prices for memory chips, caused by supply shortages. Memory chips are the parts that store and quickly move data inside computers, like a desk surface where work is laid out so it is easy to reach.

The Financial Times reported this is Samsung’s third straight quarter of record operating profit. Demand is being pushed up by AI data centers, which are large buildings filled with computers that run AI services. Samsung and SK Hynix are major suppliers of high-bandwidth memory, or HBM, a type of memory used in AI accelerator chips (special chips that help run AI faster).

What to watch

Analysts expect memory chip supply shortages could last into next year. If demand keeps rising, prices could stay elevated. Investors are also watching whether big spending on AI infrastructure leads to strong returns, after Samsung’s share price rose sharply earlier this year but has pulled back recently.

Source: Financial Times