Samsung's Q2 2024 Profits Soar on Semiconductor Rebound

Samsung's Net Profit Surges Nearly Sixfold on Strength in Chip Business -- Update

Samsung Electronics reported a nearly sixfold increase in net profit for the second quarter, with its semiconductor business generating more than half of overall operating profit as the artificial-intelligence boom continues to fuel demand for advanced chips. The world's largest maker of memory chips and smartphones forecast that demand for high-end AI chips, especially for data servers and cloud-computing services, will remain strong through the second half of 2024. Net profit soared to 9.841 trillion won, equivalent to $7.11 billion, from 1.724 trillion won a year earlier, the South Korean technology giant said Wednesday. Profit rose 46% from the previous quarter. That beat a FactSet-compiled consensus estimate of 8.228 trillion won. Revenue for the quarter rose 23% to 74.068 trillion won and operating profit increased almost 16-fold to 10.444 trillion won, largely in line with the company's preliminary estimates. The company's chip-making business posted 6.450 trillion won in operating profit for the period, accounting for about 62% of its total quarterly operating income. Brisk demand for high-bandwidth memory, double-data rate 5 and solid-state drive products continued driving strong earnings growth in the second quarter, Samsung said. The tech giant's memory-chip business had swung to a profit in the first quarter of 2024 after four straight quarters of losses. The company said it invested 8.05 trillion won in research and development during the second quarter, enhancing its overall HBM production capability while aiming to sell more advanced HBM3E products. Samsung's intensified HBM push came amid media reports that U.S. AI chip giant Nvidia cleared its HBM3 products for use in H20 processors, though its next-generation HBM3E products were still being tested for use in high-end H100 processors. Samsung declined to comment on such reports. Samsung aims to catch up with smaller Korean rival SK Hynix, which started mass production of the advanced chips in March to supply Nvidia. Shares in SK Hynix, viewed as a beneficiary of the AI boom, have risen some 34% this year, compared with Samsung's gain of about 4%. Still, the AI frenzy gave Samsung a tailwind for its smartphone and home-appliance segment. Shipments of its mobile handsets and consumer electronics rose in the June quarter after the launch of devices with AI features earlier this year, it said. Samsung retained its title as the top mobile-handset supplier with a 0.7% rise in smartphone shipments to 53.9 million units, surpassing Apple's 45.2 million units for the quarter, according to preliminary data from market research firm International Data Corp.

Samsung Eclipsed Its Previous Quarter Profit By Posting A 15-Fold Increase For Its Q2 2024 Earnings, Driven By AI Demand And Contributions From Mobile

The 933 operating profit increase posted by Samsung in Q1 2024 was nothing compared to the success the Korean giant garnered in its latest Q2 2024 quarter, as the company posted a 15-fold increase in net earnings, with various business segments displaying incredible growth during this period. Here, we take a look at which areas Samsung has improved upon and where it is expected to be cautious. On Samsung's newsroom page, the following information is stated concerning the overall revenue and operating profit generated during the Q2 2024 period. For those who are not interested in performing currency conversions themselves, the firm earned approximately $7.52 billion this quarter, compared to $502.5 billion a year ago. "The Company posted KRW 74.07 trillion in consolidated revenue and operating profit of KRW 10.44 trillion as favorable memory market conditions drove higher average sales price (ASP), while robust sales of OLED panels also contributed to the results." Thanks to the AI boom, semiconductor prices rebounded, and Samsung took full advantage of this rise. Additionally, smartphone and TV shipments increased compared to last year, contributing to the 15-fold operating profit increase. Semiconductors generated the bulk of that profit, bringing in 6.45 trillion won, or 61.8 percent of the total, making it the highest since the second quarter of 2022. Demand for faster DRAM and HBM chips used in AI applications has skyrocketed, along with the use of chips in data centers. Samsung is also on track to supply NVIDIA with HBM3E memory chipsets after reportedly passing the qualification tests, though it was previously stated that the company failed the validation stage. Even though smartphone shipments dropped in the second quarter by about 810 million won, shipments were steady at 54 million units. Samsung also retained its position as the world's biggest smartphone market for this period, beating Apple and attaining an 18 percent market share. Fortunately, this slump is not expected to last for long, as Samsung states that overall smartphone shipments in the second half of 2024 will increase due to AI functionality being integrated into these devices and getting extended to smartwatches. Samsung did not provide a future outlook for its financials, so we must wait and see how it performed in the third quarter.

Samsung's Net Profit Soars on Semiconductor Business Strength

Samsung Electronics said that its net profit rose nearly six times in the second quarter, with its semiconductor business generating more than half of overall operating profit. The strong quarterly results from the world's largest memory-chip and smartphone maker are the latest sign that chip demand remains robust, fueled by the artificial-intelligence boom, and continues to drive the South Korean technology giant's earnings recovery. Net profit soared to 9.841 trillion won, equivalent to $7.11 billion, from 1.724 trillion won a year earlier, the company said Wednesday. Profit rose 46% from the previous quarter. That beat a FactSet-compiled consensus estimate of 8.228 trillion won. Revenue for the quarter rose 23% to 74.068 trillion won and operating profit increased almost 16-fold to 10.444 trillion won, largely in line with the company's preliminary estimates. The company's chip-making business posted 6.450 trillion won in operating profit for the period, accounting for about 62% of its total quarterly operating income.

Samsung's Q2 2024 profits surge 15X on strong chip sales

Samsung has reported its earnings for Q2 2024 that ended June 30, 2024 in which the company posted 74.07 trillion won (USD 53.87 billion approx.) consolidated revenue, up 23.42% YoY, and up 2.98% QoQ. It made an operating profit of 10.44 trillion won (USD 7.59 billion), up 1458.2% YoY, as the favorable memory market conditions drove higher average sales price (ASP), while robust sales of OLED panels also contributed to the results, according to the company. The MX and Networks businesses posted 27.38 trillion won in consolidated revenue, up 7% YoY. The division posted 2.23 trillion won in operating profit, down 26.6% YoY and 36.46% QoQ. The smartphone market demand decreased sequentially in the seasonally weak quarter, particularly in the premium segment, said the company. Sales declined largely due to the base effect of launches of new models in the first quarter. However, the S24 series continued to see strong sales and achieved double-digit growth YoY in both shipments and revenue for 2Q and 1H, said the company. Profitability declined slightly in the quarter from rising prices of key components, but Samsung said that it kept it in the double digits for 1H despite persistent pressure. In the second half of 2024, overall demand for smartphones is expected to increase year-on-year, with increased demand for premium products being driven by growing demand for AI and the launch of new products with innovative features. Samsung plans to drive revenue growth by expanding sales of flagship smartphones and ecosystem products. In foldable, the company will enhance the durability, battery life, and camera and promote the Galaxy AI experience, thus solidifying our global leadership. Samsung expects S24 series to maintain its growth momentum on the back of sustained marketing efforts. It added that it will provide the Galaxy AI experience in tablets, starting with the Tab S9 series, and continue the momentum in premium sales. In wearables, Samsung expects to target the super-premium segment with the release of Watch Ultra; and offer innovations in TWS and advanced health experiences with the Galaxy Ring. "Overall, we will strive to secure solid profitability through optimizing product specifications, including component communization and standardization, and pursuing operational efficiencies," said the company.

Samsung Profit Grows Fastest in Years After Chip Arm Recovery

Samsung Electronics Co. reported its fastest pace of net income growth since 2010 after artificial intelligence boom lifted earnings at its semiconductor division. The world's largest maker of memory and smartphones posted a six-fold surge in net income to 9.64 trillion won ($6.96 billion) in the June quarter, versus the average analysts' projection for 7.97 trillion won. Samsung earlier this month reported a 15-fold rise in preliminary operating profit and a 23% rise in revenue, the biggest gain in sales since 2021.

S24 > S23.

We already knew that AI chip demand was driving crazy profits for Samsung. That's good, because its earnings report shows that smartphone revenue and profitability both declined since last quarter, even as new AI features -- it claims -- helped buoy demand for its latest flagship devices: The Galaxy S24 series achieved double-digit year-on-year growth in both shipments and revenue over its predecessor for both the second quarter and the first half of the year. In the second half of 2024, Samsung says overall demand for its smartphones is expected to increase year-on-year, alongside "ecosystem products such as tablets, smartwatches, and smart rings."