Samsung predicts its first-quarter profit will skyrocket more than 900% as AI fuels chipmakers

The South Korean technology giant said its operating profit would reach about 6.6 trillion Korean won ($4.9 billion) in the first quarter of 2024, up from 64 billion won ($473 million) a year earlier. That’s a roughly 930% increase year-over-year and well above consensus estimates of 5.4 trillion won ($3.9 billion), according to FactSet. It would also be Samsung’s highest operating profit since the third quarter of 2022.

The world’s largest memory chip maker said sales are expected to grow by more than 11% from 63.7 trillion won ($47.1 billion) to 71 trillion won ($52.5 billion).

The company did not provide any additional details Friday, although it is expected to post more detailed earnings results later in April.

Samsung Electronics stock was down about 1% in pre-market trading on Friday.

The optimistic forecast comes after four consecutive quarters of declining profits caused by slow demand for consumer devices and Samsung’s powerful chips. But chip prices have started to rebound, fueled by the surging interest in artificial intelligence that has sent Nvidia $NVDA’s and Super Micro Computer’s stocks skyrocketing this year.

SK Hynix, a rival South Korean chipmaker, said Wednesday that it expects to spend more than $3.87 billion to create a new semiconductor packaging plant and research and development center in Indiana, in a move to capitalize on the growing U.S. demand for chips. The company is also preparing a site where it will invest 120 trillion won ($88 billion) to build production factories in a new industrial complex in South Korea’s Gyeonggi Province.

Likewise, Samsung will construct several new sites in the complex at a cost of 360 trillion won ($266 billion).