Samsung Electronics has reported a significant jump in profit, driven by the growing demand for artificial intelligence (AI) and a rebound in the global memory chip market. The company's operating profit for the first quarter rose to 6.6 trillion won ($5.2 billion), a more than 10-fold increase from the same period last year.
The chip division, which accounts for the majority of Samsung's operating profit, swung to a profit of 1.91 trillion won in the March quarter, compared to a loss of 4.58 trillion won a year earlier. This marks the first profit for the division since the third quarter of 2022.
Samsung attributed the strong performance to increased demand for high-end memory chips, particularly high bandwidth memory (HBM) used in AI applications. The company plans to increase supply of HBM-related chips by more than three-fold this year, with the latest HBM3E products expected to account for two-thirds of its HBM output by year-end.
The company has begun mass production of 8-layer HBM3E chips and plans to start making 12-layer versions in the second quarter. Analysts believe the targets are aggressive, but Samsung is working hard to improve the yield of its 12-layer product.
Samsung's mobile devices business also performed well, with operating profit reaching 3.51 trillion won in the first quarter, despite increased costs and a decline in smartphone sales. The company shipped around 60 million smartphones during the quarter, retaking its title as the world's top smartphone vendor from Apple.
The company's flagship Galaxy S24 smartphones, launched during the quarter, have been driving sales, with AI functions being a key factor. According to Samsung, 50% of customers said they bought S24 phones for the AI functions, and 60% are regularly using the AI features.
Overall, Samsung's strong performance is a positive sign for the technology industry, with the company's focus on AI and high-end memory chips positioning it well for future growth.
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