The results underscore how the US$160 billion memory market is bouncing back from a severe post-COVID-19 downturn
The results underscore how the US$160 billion memory market is bouncing back this year from a severe post-COVID-19 downturn, driven by a boom in data centres and AI development. That demand pushed average memory chip prices 15 per cent higher from the previous quarter, CLSA estimates, helping Samsung’s largest division reverse losses last year.
Samsung’s depositary receipts in London were up roughly 4 per cent at 9:45 a.m. New York time. The gains sparked a broader rally across the chips sector with Infineon Technologies AG, STMicroelectronics NV, ASML Holding NV, Arm Holdings Plc among the stocks rising.
Both DRAM and NAND prices were lifted by demand for AI servers and enterprise data storage, helping to reverse inventory valuation losses, said Sanjeev Rana, an analyst at CLSA Securities Korea. Samsung’s foundry, or contract chipmaking, operations also got a boost from improved IT demand, he said.
Samsung is slated to announce final earnings with divisional breakdowns on July 31. While the company is benefiting from a broader industry recovery, investors remain concerned about its market position in the newer field of AI chips against SK Hynix Inc.
Samsung is unveilling results days before union organizers plan to stage a three-day walkout among its 28,000-plus members — including at key chip plants — over a pay dispute. The proposed action follows a strike involving a small number of staff last month that was the first in the company’s 55 years. It’s unclear for now how many employees intend to participate in Monday’s walkout.
Longer term, Samsung’s focus remains on winning more business in AI memory, while at the same time allaying fears of oversupply.
SK Hynix recently reported its fastest pace of revenue growth since at least 2010. That’s propelled a roughly 60 per cent rally in SK Hynix shares since the start of 2024, compared with a gain of about 8 per cent for Samsung’s stock.
Samsung in May unexpectedly named Jun Young Hyun — a memory chip veteran who is returning to the company after leading Samsung SDI Co. — as the new leader of its most important business line, replacing Kyung Kye-hyun.
In previous quarters, solid sales of Samsung’s smartphones helped it ride out sluggish chip demand. South Korea’s biggest company is holding a Galaxy Unpacked event in Paris next week in a bid to sustain momentum for its phones.
With assistance from Vlad Savov