According to projections, Samsung Electronics’ second-quarter earnings from a year ago increased by a factor of thirteen due to the rise in memory chip prices driven by the demand for artificial intelligence technologies.

The average LSEG SmartEstimate from 27 analysts—weighted towards those who are more consistently accurate—indicates that operating profit for the largest manufacturer of memory chips, cellphones, and TVs in the world increased to 8.8 trillion won ($6.34 billion) in the quarter that ended on June 30.

That sum would be Samsung’s largest profit since 2022’s third quarter. It contrasts with the 670 billion won operational profit from the second quarter of the previous year.

The tech giant’s main semiconductor division’s performance probably improved as it reported its second consecutive quarterly profit, even though memory chip prices continued to rise after hitting a low point in mid-2022 to end-2023 due to a lacklustre post-pandemic demand for the chips’ using devices.

A widespread rebound in the semiconductor sector is supported, according to experts, by the explosive demand for high-end DRAM chips, such as high bandwidth memory (HBM) chips used in AI chipsets, as well as chips used in data centre servers and devices that run AI services.

According to data source TrendForce, memory chip costs increased in the second quarter by around 13% to 18% compared to the previous quarter for DRAM chips used in tech gadgets and 15% to 20% for NAND Flash chips used for data storage.

Based on the average projections of ten experts, Samsung’s semiconductor division’s estimated operating profit for the second quarter was 4.6 trillion won. In contrast, during the same period previous year, there was a loss of 4.36 trillion won.

Analysts speculated that because of increasing marketing and development expenses for AI services as well as steeper part prices, the company’s mobile division probably witnessed a decline in operating profit in the second quarter of this year while delivering a comparable number of handsets.

Based on the average prediction of 10 experts, the mobile company probably posted an operational profit of about 2.2 trillion won, which is less than the 3.04 trillion won profit they made the previous year.

When Samsung debuts its newest flagship foldable phones and mobile accessories, including a new ring for health monitoring, in Paris on July 10, it is anticipated to challenge competitor Apple at the upper end of the market.

(Adapted from USNews.com)