Investing.com-- Samsung Electronics Co Ltd (KS:005930) clocked a tenfold surge in its first quarter profit, aided chiefly by a recovery in chip demand thanks to the rapidly growing artificial intelligence industry.
The world’s biggest memory chips and smartphone maker said operating profit rose to 6.6 trillion won ($4.8 billion) in the three months to March 31, up from the 640 billion won seen last year. The reading was in line with estimates released by Samsung (LON:0593xq) at the beginning of April.
First-quarter revenue rose to 71.9 trillion won from 63.75 trillion won a year ago, Samsung said in a press release. Stronger sales of its flagship Galaxy S24 smartphone line also factored into the increased revenue, as did a weaker South Korean won.
The bumper results come as increasing AI development sparked a rebound in chip demand in recent quarters. Samsung’s high-bandwith memory chips are a key component of the processors used in running AI models.
The company recently outlined plans to begin developing the next generation of HBM chips, citing expectations of increased demand from AI. Samsung began mass production of advanced HBM3E chips in April. Its rival SK Hynix Inc (KS:000660) was until April the only maker of HBM3E chips- currently the most advanced memory chips, which are used primarily in AI development.
Still, Samsung’s seemingly exponential growth in profit was also in part driven by a weak base for comparison from 2023, where the chipmaker was still grappling with weak global demand.
The chipmaker said its second quarter will also “remain solid” on demand from AI.