South Korean tech giant Samsung has announced an extraordinary increase in its operating profit for the second quarter of 2023. The company estimates an operating profit of 10.4 trillion won (approximately $7.54 billion) for the quarter ending June 30, representing a remarkable 15-fold increase compared to the same period last year.
This impressive growth has surpassed analysts’ expectations, who had predicted a profit of 8.8 trillion won according to LSEG SmartEstimate. Samsung’s revenues also saw a significant boost, rising by about 23% to reach 74 trillion won in Q2.
The company’s success can be attributed to the booming demand for high-performance chips, particularly those used in AI applications and data centers. The explosive growth in AI-related technologies has led to a substantial increase in memory chip prices, with DRAM prices rising 13-18% and NAND Flash prices increasing 15-20% in Q2, according to TrendForce.
Despite these positive results, Samsung faces some challenges. The company recently replaced its semiconductor division head to address the ongoing “chip crisis.” Additionally, Samsung is dealing with a potential three-day strike starting July 8, organized by a workers’ union demanding a more transparent bonus system and improved time off.
While Samsung’s profit surge reflects its ability to capitalize on the AI boom and industry changes, it remains to be seen whether the company can maintain this momentum in the long term. The market response has been cautiously optimistic, with Samsung’s stock price rising 1.2% following the announcement.
