SAMSUNG
Data centre feast
Samsung Electronics expects profits to jump 19x, thanks to huge demand for AI memory chips.
The South Korean tech giant forecast operating profits of 89.4tn won, around £43.6bn, for April to June.
That would be its third record quarterly profit in a row.
Samsung also said sales more than doubled from the same period last year, reaching about 171tn won.
Analysts said this could be one of the company’s best quarters ever.
The main reason is the AI boom. Data centres and AI companies need large amounts of memory chips, but supply is still tight.
That has allowed Samsung to raise prices.
Research firm IDC said demand from AI infrastructure is putting pressure on the wider chip market, including chips used in everyday electronics.
In brief:
AI demand is pushing memory-chip prices up.
Samsung and SK Hynix are major winners from the boom.
Investors are still being very normal about record profits.
Memory gets minted
Samsung supplies chips to major firms including Nvidia and Google, as well as using them in its own devices.
Its shares have more than doubled this year, while rival SK Hynix has risen by more than 200%.
Even so, Samsung’s shares fell almost 7% after the forecast, as some investors expected even bigger profits.
Apparently, 19 times higher is no longer enough to impress the spreadsheet people.
The chip race is also getting bigger.
South Korea recently announced plans for at least $880bn in chip investments led by Samsung and SK Hynix, while rivals in Japan, China and Taiwan are also building more factories.
Imagine making 19 times more money and still getting side-eyed by investors.- MG