Samsung’s working revenue soars 930% as AI tailwinds drive demand for reminiscence chips

Samsung Electronics mentioned on Tuesday that its working revenue surged greater than 930% within the first quarter of 2024, pushed by hovering demand for its servers, reminiscence chips and storage utilized in AI purposes.

The corporate, which struggled in 2023 because the macroeconomic slowdown harm demand for its merchandise, mentioned its reminiscence chip enterprise returned to profitability, and costs continued to rise due to stable demand for DRAM and NAND chips, high-density SSDs and servers. 

Samsung mentioned complete income rose 12.8% to KRW 71.2 trillion ($52.2 billion) within the quarter from a 12 months earlier, whereas web revenue rose 330% to KRW 6.75 trillion ($4.88 billion) in comparison with a 12 months earlier. 

Samsung’s semiconductor enterprise drove the majority of the development, with gross sales within the division rising to KRW 23.14 trillion ($16.71 billion) within the first quarter, up from KRW 13.73 trillion ($9.92 billion) a 12 months earlier, pushed by robust demand for DDR5 chips and storage used for AI servers. The division reported an working revenue of KRW 1.91 trillion ($1.3 billion) within the quarter, in comparison with an working lack of KRW 4.58 trillion ($3.3 billion) within the first quarter of 2023, and an working lack of KRW 2.18 trillion ($1.57 billion) within the fourth quarter of 2023. 

Mass manufacturing plans in 2024

Samsung has been eager on catering to the rising compute energy wants of generative AI and the servers wanted to host the mountains of information that fashions are educated on. The corporate final 12 months mentioned it could double down on producing high-bandwidth reminiscence (HBM) chips which might be utilized in AI, 5G, the Web of Issues (IoT), graphic processing purposes, digital actuality and augmented actuality programs. These chips present quicker knowledge processing and decrease energy consumption in comparison with the normal NAND reminiscence chips.

Consistent with that ambition, Samsung on Tuesday mentioned it has begun mass-producing high-performance reminiscence chips, like HBM3E 8H (8-layer) DRAM, in addition to V9 NAND chips, sometimes used in enterprise servers, AI and cloud gadgets. The corporate mentioned it additionally intends to provide HBM3E 12H (12-layer) chips within the second quarter of this 12 months. 

Samsung is the world’s largest reminiscence chip maker and competes with Micron and SK Hynix, a Korean reminiscence chip maker, available in the market for HBM chips. Micron kicked off its mass manufacturing of 8-layer HBM3E semiconductors in February, and final month at NVIDIA’s GTC 2024, SK Hynix mentioned it had additionally began mass producing HBM3E chips. 

As for its foundry enterprise, Samsung mentioned its improvement of 3-nanometer and 2-nanometer AI chips is “progressing easily.” 

Optimistic forecast

Samsung anticipates demand will stay robust within the second half of this 12 months, buoyed by rising adoption of generative AI. 

“Within the second half of 2024, enterprise situations are anticipated to stay optimistic with demand — primarily round generative AI — holding robust, regardless of continued volatility regarding macroeconomic developments and geopolitical points,” the corporate mentioned in an announcement. 

“For servers and storage, the continual improve within the provide of AI servers and subsequent growth of related cloud companies will improve demand not just for HBM, but in addition for standard servers and storage options. Demand for cell is predicted to be steady within the quarter, whereas PC clients are predicted to be affected by gradual seasonality, making them more likely to alter their inventories forward of latest product launches within the second half of the 12 months,” the corporate mentioned.

Two weeks in the past, the Biden administration agreed to award Samsung as much as $6.4 billion in direct funding below the CHIPS and Science Act to arrange semiconductor factories in Texas. 

The grant will allow the South Korean digital large to develop modern chips by investing in two new logic chip crops, an R&D facility, a complicated packaging facility in Taylor, and its current facility growth close to Austin. Micron and TSMC are also set to obtain grants to bolster home semiconductor manufacturing.