Samsung's Q1 operating profit nearly doubled, and the semiconductor division resumed profitability for the first time since 2022
Samsung Electronics released its latest financial report on April 30th, as demand for advanced storage chips crucial for artificial intelligence (AI) computing surged in the market. Samsung's semiconductor business has returned to profitability for the first time since 2022.
Samsung's financial report shows that its Device Solutions (DS) division had an operating profit of KRW 1.9 trillion (USD 1.4 billion) in the first quarter of this year, compared to a loss of KRW 4.6 trillion a year ago. During the same period, the department's revenue surged by 68% to 23.1 trillion Korean won. The DS department includes storage, system LSI, and chip foundry businesses.
As for the entire company, driven by its mobile business, Samsung's operating profit from January to March increased by 931.9% year-on-year to 6.6 trillion Korean won, nearly 10 times that of last year, and total revenue increased by 12.8% to 71.9 trillion Korean won. Samsung's net profit increased by 328.9% to 6.8 trillion Korean won.
Samsung is the world's largest smartphone manufacturer and is attempting to reverse a year long decline caused by global economic uncertainty. In 2023, the company's semiconductor division suffered a loss of 14.9 trillion Korean won, and overall operating profit fell to a 15 year low.
Samsung stated in its financial report that it expects chip demand to remain strong in this quarter and the second half of this year, largely due to demand for generative artificial intelligence.
Samsung is eager to take advantage of the trend of generative artificial intelligence to provide Nvidia with its high bandwidth storage (HBM) chips. Nvidia is verifying Samsung's HBM3e chip, which is the latest product in the company's advanced storage chip series. "The storage business has resumed profitability by meeting the needs of servers, storage, personal computers, and mobile devices, with a focus on high value-added products such as HBM, achieving qualitative growth... At the same time, the average selling price has also increased," Samsung said in a press release.
Samsung Semiconductor Business Manager Kyung Kye hyun stated at the company's annual shareholder meeting in March that as the long-term downturn begins to end, the department is expected to recover to 2022 levels this year. The department's average quarterly operating profit exceeded 10 trillion Korean won that year.
As for the entire company, driven by its mobile business, Samsung's operating profit from January to March increased by 931.9% year-on-year to 6.6 trillion Korean won, nearly 10 times that of last year, and total revenue increased by 12.8% to 71.9 trillion Korean won. Samsung's net profit increased by 328.9% to 6.8 trillion Korean won.
Samsung is the world's largest smartphone manufacturer and is attempting to reverse a year long decline caused by global economic uncertainty. In 2023, the company's semiconductor division suffered a loss of 14.9 trillion Korean won, and overall operating profit fell to a 15 year low.
Samsung stated in its financial report that it expects chip demand to remain strong in this quarter and the second half of this year, largely due to demand for generative artificial intelligence.
Samsung is eager to take advantage of the trend of generative artificial intelligence to provide Nvidia with its high bandwidth storage (HBM) chips. Nvidia is verifying Samsung's HBM3e chip, which is the latest product in the company's advanced storage chip series. "The storage business has resumed profitability by meeting the needs of servers, storage, personal computers, and mobile devices, with a focus on high value-added products such as HBM, achieving qualitative growth... At the same time, the average selling price has also increased," Samsung said in a press release.
Samsung Semiconductor Business Manager Kyung Kye hyun stated at the company's annual shareholder meeting in March that as the long-term downturn begins to end, the department is expected to recover to 2022 levels this year. The department's average quarterly operating profit exceeded 10 trillion Korean won that year.