South Korean technology giant Samsung Electronics on Tuesday forecast a roughly 19-fold jump in second-quarter operating profit from a year ago, buoyed by steady AI-driven demand for memory chips.
The world’s largest memory chip maker estimated April-June operating profit at 89.4 trillion won ($58.4 billion) – up 1,810 percent from a year earlier, the company said in a statement.
Furious global demand for advanced memory chips used in artificial intelligence data centers has already helped South Korean semiconductor giants post record profits this year.
The boom has also strengthened workers’ demands for higher wages, and Samsung avoided a major strike in May after reaching a deal on workers’ compensation.
Tuesday’s estimate beat market forecasts by 6.2 percent and marked another quarterly record, according to South Korea’s Yonhap news agency, citing its data firm.
Revenue is likely to rise 129 percent to 171 trillion won, Samsung said. The company is expected to release its final earnings report at the end of the month.
Samsung and domestic rival SK hynix are involved in a massive $800 trillion public-private investment to build a new semiconductor fabrication center in the southwest of the country.
Some analysts see potential delays to investment in AI infrastructure as the biggest risk to the current memory boom.
But MS Hwang, a research analyst at Counterpoint Research, said he saw “no evidence that the gap between suppliers’ production capacity and customer demand is narrowing”.
“While some data center projects associated with less competitive players may be delayed, it would be an exaggeration to interpret this as a broad slowdown in AI infrastructure investment,” he told AFP.
– Windfall tax revenue –
South Korea’s artificial intelligence semiconductor boom has also fueled debate over what the country should do with increased tax revenue brought on by the success of Samsung Electronics and SK hynix.
Presidential Chief of Staff Kang Hoon-sik said on Sunday that the windfall taxes will help finance large-scale projects around AI and the semiconductor industry.
It would also help to reduce inequality and support young people in accessing housing, establishing start-ups and finding jobs, he added.
A simple jacket bearing the SK hynix logo went viral online earlier this year as a symbol of wealth and success, with parody posts describing it as a “golden ticket” to luxury boutiques or better dating prospects.
Jobs at Samsung and SK hynix now guarantee “an increase in the value of the marriage market,” Yonhap reported, citing a rise in their “desirability indices” compiled by matchmaking agency Sunoo – putting them on par with doctors and lawyers.
Analyst Hwang said Samsung’s valuation on Tuesday was a “very reasonable provision”.
“While bonus accruals and losses in certain business may outweigh the gains, the memory gains alone are likely to be substantial,” he said.
