Samsung Electronics, the South Korean tech giant, reported a remarkable 932.8% increase in its operating profit for the first quarter of 2024 (January to March). This surge has exceeded expectations and highlights the company’s strong performance in a challenging economic environment. In the first quarter of 2024, Samsung also emerged as the world’s top smartphone provider, overtaking Apple with a 20.8% market share compared to Apple’s 17.3%. In early 2023, Samsung’s market share was around 22.5%, with Apple and Huawei as its closest competitors. In 2022, Samsung sold almost 260 million smartphones worldwide. This is for the first time that Apple has slid to the 2nd position.

Key Reasons Behind Samsung’s Outstanding Performance

It is important to understand the dynamics of Samsung’s performance, which is not only centered around smartphones but various other factors. Notable among many are AI applications, its memory chip business, DDRS chips AI servers, etc.

1. AI Tailwinds and Memory Chip Demand:
   • AI Applications: The soaring demand for memory chips and storage used in AI applications has been a significant driver. As AI technologies continue to evolve, the need for high-performance servers and memory chips has surged.
   • Memory Chip Business: Samsung’s memory chip business returned to profitability after a tough 2023. Prices for DRAM and NAND chips, as well as high-density SSDs and servers, continued to rise due to solid demand.
   • DDR5 Chips and AI Servers: Strong demand for DDR5 chips and storage used in AI servers contributed to the impressive performance of Samsung’s semiconductor division.
   • HBM (High-Bandwidth Memory) Chips: Samsung doubled down on producing HBM chips used in AI, 5G, IoT, graphic processing, virtual reality, and augmented reality systems. These chips provide faster data processing and lower power consumption compared to traditional NAND memory chips.
   • Mass Production Plans: Samsung has already begun mass-producing high-performance memory chips, including HBM3E 8H (8-layer) DRAM and V9 NAND chips. Additionally, they plan to produce HBM3E 12H (12-layer) chips later this year.
2. Foundry Business and AI Chips:
   • Samsung’s development of 3-nanometer and 2-nanometer AI chips is progressing smoothly. The company anticipates strong demand in the second half of 2024, driven by the increasing adoption of generative AI.

Financial Highlights:

• Total Revenue: Increased by 12.8% to KRW 71.2 trillion ($52.2 billion) in Q1 2024 compared to the previous year.
• Net Profit: Rose by 330% to KRW 6.75 trillion ($4.88 billion) compared to a year earlier.
• Operating Profit: Surged to KRW 6.61 trillion ($4.77 billion) in Q1 2024 from KRW 640 billion (about $462 billion) a year earlier.

Samsung’s semiconductor business played a pivotal role in this remarkable performance, reflecting the company’s commitment to innovation and meeting the growing demands of AI-driven technologies.