Samsung expects AI to drive sales of chips and smartphones in 2024

Strong chip and smartphone sales helped Samsung post a tenfold increase in profit for the first quarter.
Written by Cho Mu-Hyun, Contributing Writer
Samsung logo at MWC 2024
Kerry Wan/ZDNET

Samsung said on Tuesday that it expects demand for chips and tech devices to remain strong through the year, driven by artificial intelligence (AI).

The company reported an operating profit of 6.61 trillion won for the first quarter, a tenfold surge from a year earlier as its chip division returned to profitability after a severe downturn in 2023. 

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Revenue also jumped 12.8% to 71.92 trillion won in the first quarter, backed by strong sales of Galaxy S24 smartphones and increased prices of memory chips, Samsung noted.

Business conditions are expected to remain positive through 2024 due to strong overall demand, mainly around generative AI, the South Korean tech giant said.

For the first quarter, Samsung's chip division, the Device Solutions (DS) Division, contributed 1.9 trillion won in operating profit, a return to profit after last year's 4.58 trillion won loss. Samsung said it achieved "qualitative growth" by focusing on high-value-added products for demand across servers, storage, PC, and mobile.

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In servers and storage, the division's main growth-driving sector, demand for generative AI showed solid trends, the company said. 

The continuous increase in the supply of AI servers and the expansion of associated cloud services will increase demand for high-bandwidth memory (HBM) and conventional servers and storage solutions, Samsung added. HBM3E 8H went into mass production this month and HBM3E 12H is also expected to start production in the second quarter, the company added.

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Meanwhile, the Mobile Experience (MX) Business, the company's smartphone business unit, contributed 3.51 trillion won in operating profit for the first quarter.

According to Samsung, strong sales of the Galaxy S24 series allowed the unit to maintain double-digit profitability despite the quarter traditionally being a weak demand season. Galaxy AI features on the phone, such as Circle to Search, showed high usage rates and contributed to sales growth, the company said.

For 2024, the MX Business aims to maintain its sales momentum with the expansion of Galaxy AI to more phones, foldable devices, and tablets.

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