Samsung Electronics says it expects to post a 19-fold jump in its profits given the explosive demand for its AI memory chips. The South Korean tech giant estimates an operating profit of 89.4 trillion won for the first half of this year, equivalent to around $58.4 billion, which is an increase of 1,810% compared with the same period last year.
Revenue is expected to increase sharply. Samsung said sales likely reached 171 trillion won in the quarter, an increase of 129% compared to the previous year. The company expects to publish results at the end of this month.
The announcement of earnings demonstrates the changing landscape in the semiconductor sector as a result of the global AI boom. Advanced memory chips in data centers and AI systems remain in short supply, allowing companies like Samsung and SK Hynix to raise prices and improve margins.
Samsung's latest estimate is among “the best quarterly performances ever,” according to Marc Einstein from Counterpoint Research. “This is all because of the AI boom,” he said.
Samsung is one of the world's largest makers of memory chips and a supplier of semiconductors to the world's leading technology companies, such as NVIDIA and Google. The company's performance is coming at a time when global demand for AI chips continues to exceed supply.
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According to IDC, the memory industry has experienced a different type of demand in the data centre and AI infrastructure segment compared to previous cycles. IDC's Bryan Ma predicted strong demand from AI data centers will keep chip supplies tight for the coming year.
Despite the strong earnings estimate, the shares of Samsung dropped around 7% to 8% in Seoul trading, as some investors had been hoping for an even higher profit. Nevertheless, Samsung's market value has doubled since the start of the year, while SK Hynix is up over 200%.
The Kospi index, South Korea's benchmark index, is more than 80% higher this year, driven by the performance of key chip makers.
The boom has brought broader economic effects in South Korea. In June, the country announced a plan to invest at least $880 billion in investments linked to Samsung and SK Hynix to increase chip production. However, the key danger lies in how far the AI memory demand grows beyond next year, analysts warn.
For now, Samsung remains among the top beneficiaries of the global AI infrastructure race.