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South Korean electronics giant Samsung beat Wall Street’s expectations in its second-quarter earnings, partly driven by strong demand for its memory chips, which are needed for artificial intelligence chips.
Samsung reported revenue of almost 74.1 trillion won, or about $54 billion, for the second quarter of 2024 — a 23.42% increase from the previous year. The company reported operating profit of 10.44 trillion won, or $7.6 billion — a whopping 1,458.2% year-over-year jump.
Strong demand for the company’s high-bandwidth memory (HBM) chips and other memory chips drove results, Samsung said. Investments in AI by cloud service providers as well as growing business demand for AI servers are increasing demand for the company’s chips. Samsung said it expects strong demand for AI servers in the second half of the year as these investments continue.
Amid high demand for AI chips, Samsung said it would expand capacity to increase sales of its fifth-generation HBM3E memory chips. Chipmaker Nvidia has reportedly approved Samsung’s fourth-generation HBM3 memory chip for use in its H20 AI chips specifically designed for the Chinese market. The H20 graphics processing unit, or GPU, is one of three chips Nvidia designed to not require an export control license. However, the HBM3E memory chips have reportedly not met Nvidia’s standards, and the company is continuing to test them.
Meanwhile, U.S.-based Advanced Micro Devices (AMD) also beat Wall Street’s expectations in its earnings results, reporting revenue of $5.8 billion for the second quarter of 2024. The “strong revenue and earnings growth” was “driven by record Data Center segment revenue,” AMD chair and chief executive Lisa Su said. Data center revenue was $2.8 billion for the quarter — up 115% from the previous year. AMD’s new AI chips are set to rival those from Nvidia.
“Our AI business continued accelerating and we are well positioned to deliver strong revenue growth in the second half of the year led by demand for Instinct, EPYC and Ryzen processors,” Su said.
Samsung’s stock is up 5.4% so far this year, while AMD’s stock is up 2.8%.