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Samsung predicts prodigious profit pop • The Register

Samsung predicts prodigious profit pop • The Register
Samsung predicts prodigious profit pop • The Register

Samsung Electronics has advised investors it is set to post bumper profits and notch a big jump in revenue for the quarter ended June 30.

The Chaebol today delivered quarterly guidance of ₩74 trillion revenue and ₩10.4 trillion profit – $53.7 billion and $7.5 billion, respectively.

The profit projection is fifteen times higher than the ₩640 billion ($460 million) profit in the same quarter of 2023, and revenue is up a little more than ₩10 trillion ($7.2 billion).

Samsung’s guidance doesn’t explain the source of its revenue and profit jumps. While global smartphone shipments – a market in which Samsung moves more units than any other brand – are up six percent according to analyst firm Counterpoint Research, that’s a field in which margins are tight. The Galaxy range of devices is therefore not likely to have delivered the Korean behemoth its pleasing new balance sheet.

Memory-centric analyst outfit TrendForce may have another explanation for the surge: growing demand for servers and DRAM that it found prompted a 13–18 percent price jump in Q2. The firm predicts the segment will see further rises of eight to thirteen percent this quarter.

Don’t say we didn’t warn you. In December 2023 The Register relayed advice from analyst firm Gartner to the effect that it was time to go shopping for memory before prices popped in 2024.

Memory is a high-margin product, and is in demand thanks to interest in generative AI. Indeed, Samsung rival SK hynix has already sold all of next year’s production of the high-bandwidth memory needed for accelerators and servers running AI workloads. Demand for all forms of server will likely remain strong, as the new manycore processors from AMD and Intel are predicted to spark a wave of fleet refreshes.

This quarter may therefore not be an outlier, which Samsung will welcome – while this reporting period delivered cracking numbers, revenue and profit remain behind the levels it achieved in Q2 2022.

Whatever the cause of Samsung’s success, it’s not alone. South Korea’s government this week reported an all-time record for semiconductor exports – so it’s not just Samsung doing well at present. ®

Samsung predicts prodigious profit pop • The Register

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