Samsung Electronics Co. exceeded analysts’ earnings forecasts as its semiconductor unit returned to profitability while companies such as Microsoft Corp. and Alphabet Inc. drove an uptick in spending on artificial intelligence (AI) services.
The world’s leading memory chipmaker recorded a net income of 6.62 trillion won ($4.8 billion) in the March quarter, surpassing the average analyst estimate of 5.63 trillion won, marking a significant increase from the previous year’s earnings.
This financial success highlights the resurgence in demand for memory chips essential for modern electronics and AI applications following a challenging period of low demand. The company’s stock prices also saw a rise of up to 2.4% during trading in Seoul.
Meanwhile, Samsung is trying to grapple with a year-long decline amid global economic instability, as in 2023, the company saw its overall operating profit hit a 15-year low after a substantial loss in its semiconductor division.
Recent market trends indicate a gradual recovery, with a notable push for AI chip development after the launch of OpenAI’s ChatGPT. Samsung’s chip unit reported an operating profit of 1.91 trillion won, surpassing expectations and returning to profitability after four consecutive quarterly losses. The South Korean trade data released this month showed a 43% increase in semiconductor shipments, fueling the nation’s export growth in the first 20 days of April compared to the previous year.
In addition, Samsung expressed confidence in the ongoing and anticipated robust demand for chips in the current quarter and the latter half of the year, particularly driven by generative AI needs, while the financial reports of technology giants Microsoft and Alphabet, parent company of Google, outperformed analyst predictions, partly due to the increased uptake of AI services.
