Samsung said on Tuesday that it expects demand for chips and high-tech equipment to remain strong throughout the year, driven by AI.
The company reported first-quarter operating profit of 6.61 trillion won, a 10-fold jump from the same period last year as its chip division returned to profitability after last year's severe recession. Samsung also pointed out that sales for the quarter rose 12.8% to 71.92 trillion won, due to strong sales of the Galaxy S24 smartphone and rising memory chip prices.
The South Korean technology giant said business conditions are expected to remain favorable throughout 2024 due to strong overall demand, mainly centered on generative AI.
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Samsung's chip division, Device Solutions (DS), posted operating profit of 1.9 trillion won in the first quarter, returning to profit from last year's loss of 4.58 trillion won. Samsung said it achieved “qualitative growth” by focusing on high value-added products that meet server, storage, PC and mobile demands.
The company said demand for generative AI showed a solid trend in servers and storage, the division's main growth driver. Samsung added that the continued increase in the supply of AI servers and the corresponding expansion of related cloud services will increase the demand for high-bandwidth memory (HBM) as well as traditional servers and storage solutions.
The company added that HBM3E 8H will begin mass production this month, and HBM3E 12H will also begin mass production in the second quarter.
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Meanwhile, the company's smartphone business division, Mobile Experience (MX), contributed 3.51 trillion won to operating profit in the first quarter.
Samsung said strong sales of the Galaxy S24 series helped the division maintain double-digit profits, despite the quarter being traditionally a period of weak demand. The company said the phone's Galaxy AI features, such as Circle to Search, had high usage rates and contributed to the increase in sales.
MX Business aims to maintain sales momentum by expanding Galaxy AI to more phones, foldables and tablets throughout 2024.