Samsung Electronics expects to post a 19-fold jump in profits, driven by insatiable global demand for artificial intelligence memory chips — but its shares fell more than 8% in Seoul on Tuesday as some investors had hoped for even higher returns.
The South Korean giant forecast operating profits of 89.4tn won (£43.6bn; $58.4bn) for April to June, marking its third record quarterly operating profit in a row, with sales of around 171tn won — more than double the same period last year.
“Samsung profits soared 19-fold to record $58.4bn on AI chip demand, but shares fell 8% as investors wanted more.”
Demand for semiconductors continues to outstrip supply, pushing up prices. “This has everything to do with the AI boom as memory companies continue to ride a tidal wave driven by limited supply and unprecedented demand,” said Marc Einstein, industry analyst at Counterpoint Research. He described Samsung’s projected earnings as “one of the best quarterly performances ever”, close to the tech sector record set by Nvidia earlier this year.
Samsung has hiked memory chip prices as supplies remain tight. Research firm IDC said demand for chips used in data centres and AI infrastructure has been “different from anything the memory industry has navigated”, affecting supplies for everyday electronics. “We do expect supplies to be tight through next year given the unabated demand from AI data centres,” said Bryan Ma, a tech devices researcher at IDC.
Despite the stellar results, Samsung’s shares fell sharply on Tuesday morning — though its stock market value has more than doubled since the start of 2024. Rival SK Hynix has jumped more than 200%, and the strong performance of both companies has lifted South Korea’s benchmark Kospi index by over 80% this year.
In May, Nvidia posted record quarterly sales and revenue of more than $80bn, but its stock also fell — a sign, some analysts said, that investors were growing wary of rising competition. The sell-off at Samsung, despite record profits, underscores just how high expectations have become in the AI chip market.
In June, South Korea unveiled plans for at least $880bn of investments in projects led by Samsung and SK Hynix to expand the country’s chip manufacturing in the coming years.