Samsung Electronics is gearing up for a surge in demand for artificial intelligence technology in the second half of the year. The company announced a more than ten-fold increase in first-quarter operating profit, attributing it to the high demand for AI technology.
The South Korean tech giant reported that its memory chip sales nearly doubled in the first quarter compared to the same period last year, with prices climbing sharply. This surge in artificial intelligence has propelled Samsung’s memory chip unit to record a profit for the first time since the third quarter of 2022.
Samsung’s operating profit increased to 6.6 trillion won ($4.8 billion) in the first quarter, a significant jump from 640 billion won the previous year. The company also reported a 13% increase in revenue to 71.9 trillion won, with a 96% increase in memory chip revenue to 17.49 trillion won.
In response to the growing demand for AI technology, Samsung has started mass producing the newest high bandwidth memory (HBM) chips for use in generative AI chipsets. The company is also planning to produce a 12-layer version of the HBM chips in the second quarter.
While Samsung’s mobile devices division reported a decline in operating profit due to rising expenses, particularly higher memory chip pricing, the company remains optimistic about the future. Samsung shares saw a 1.6% increase during morning trading, surpassing the benchmark index in South Korea.
Rival company SK Hynix also anticipates a complete recovery in the memory chip industry due to AI demand. As the demand for AI technology continues to grow, Samsung is well-positioned to capitalize on this trend and maintain its strong performance in the market.