Samsung's Second-Quarter Operating Profit Soars in Semiconductor Market

Samsung Electronics has announced a remarkable increase in its second-quarter operating profit, exceeding expectations and demonstrating strong performance in the semiconductor market. The company's operating profit soared to 10.4 trillion won ($7.54 billion) from 670 billion won in the same period last year, representing a more than 15-fold rise.

This substantial growth in earnings can be attributed to the recovery of semiconductor prices, primarily fueled by the artificial intelligence sector. The surge in demand for high-end DRAM chips, particularly those used in AI chipsets and data center servers, has been a key factor driving the increase in chip prices.

Analysts also point to the reversal of inventory writedowns on Samsung's books as a contributing factor to the better-than-expected profit. The value of Samsung's chip inventory has rebounded in accounting terms, further boosting the company's profit figures.

Industry experts are eagerly awaiting Samsung's outlook on legacy chips during the upcoming earnings call, as this will shed light on the sustainability of the chip industry recovery going forward. Despite challenges in the supply of high-end HBM chips, Samsung is poised to benefit from the growing demand for advanced chips like SSDs driven by AI applications.

While Samsung's semiconductor division has shown strong performance, the company faces competition from U.S. memory chip rival Micron Technology, which recently reported robust revenue figures driven by increased demand from the AI sector. Investors are closely watching Samsung's progress in securing approval for supplying fourth-generation HBM chips to Nvidia after initial setbacks.

Samsung's impressive performance in the semiconductor market reflects its strategic decisions and product developments. With a positive growth trajectory in its shares year-to-date, Samsung's continued focus on innovation and adapting to industry trends will be crucial in maintaining its competitive edge in the evolving chip market.