South Korean tech giant Samsung Electronics' recently released financial report showed that its profit achieved a staggering increase in the second quarter of 2024, mainly due to the strong recovery of the memory chip business. This performance not only exceeded market expectations, but also marked the further consolidation of Samsung Electronics' leading position in the global semiconductor industry.
According to Samsung Electronics' financial report, the company's sales in the second quarter of 2024 reached 74 trillion won (about 390 billion yuan), a year-on-year increase of 23.31%. What's more striking is that the operating profit reached 10.4 trillion won (about 54.8 billion yuan), an astonishing 1452.24% year-on-year. This figure not only far exceeded the performance of the same period last year, but also exceeded the consensus expectations of market analysts.
The recovery of the memory chip business is the main driver of Samsung Electronics' soaring profits. With the rapid development and widespread application of artificial intelligence (AI) technology around the world, the demand for memory chips has grown dramatically. As one of the world's largest memory chip manufacturers, Samsung Electronics' DRAM and NAND Flash products occupy an important position in the global market. Thanks to the growth in market demand and the rebound in prices, Samsung Electronics' memory chip business achieved significant profitability in the first quarter of 2024 and continued its strong growth momentum in the second quarter.
Figure:Memory Chip Business Recovers Samsung's Profit Increased by More Than 15 Times
According to the financial report, the revenue of Samsung Electronics' device solutions (DS) division, which is responsible for the semiconductor business, reached 23.14 trillion won in the first quarter of 2024, a year-on-year increase of 68.54%. Among them, the revenue of the storage business reached 17.49 trillion won, an increase of 11% month-on-month and a 96% year-on-year increase. This performance not only enabled the DS division to become profitable for the first time since the fourth quarter of 2022, but also laid a solid foundation for Samsung Electronics' overall profit growth.
Driven by AI technology, Samsung Electronics has increased its investment in AI-oriented memory technologies such as high-bandwidth memory (HBM) to meet the market demand for high-performance storage products. These efforts not only enhance the company's technological competitiveness, but also bring more market share and profit growth points for the company.
In addition, Samsung Electronics has also excelled in other business areas. For example, the Video Display (VD) and Mobile Experience (MX) divisions in its Device Experience (DX) division benefited from strong sales of new TVs and Galaxy S series smartphones, receiving bonuses of 50% and 75% of their monthly base salary, respectively. These results demonstrate that Samsung Electronics has maintained strong growth momentum in multiple business areas.
However, it is worth noting that Samsung Electronics has faced some challenges while achieving its current achievements. For example, labor tensions can lead to production disruptions, which in turn can adversely affect a company's performance. In addition, the global semiconductor market is becoming increasingly competitive, and Samsung Electronics needs to continue to strengthen technological innovation and product research and development to maintain its leading position in the market.
Still, judging by current trends, the future of Samsung Electronics remains promising. With the continuous development of AI technology and the continuous growth of market demand, the memory chip business is expected to continue to lead the company's strong growth. At the same time, the company's expansion in other business areas will also bring more growth points for the company. Therefore, we have reason to believe that Samsung Electronics will continue to maintain its position as a global tech giant in the future.
