Increased demand for NAND and DRAM processors is a significant driver of higher profits for the first quarter of this year. The South Korean tech giant estimates profits to be 6.6 trillion Korean won (€4.51 billion).
According to expectations, this represents an increase of 931 per cent compared to the same period in 2023. Back then, profits of 640 billion won were recorded. Last quarter’s revenue is also the tech group’s highest quarterly profit since the third quarter of 2022.
Sales in the first quarter of this year are expected to total 71 trillion won (€48.5 billion), an 11 per cent year-on-year growth.
Higher processor prices lucrative
According to Reuters, the higher sales are due to the higher prices paid for processors. Demand for processors is increasing significantly due to the rise of AI and the sale of more devices after the pandemic.
The prices of NAND flash memory processors are increasing, which also increases margins and contributes to higher sales. Average prices of NAND processors rose between 23 and 28 per cent in the first quarter of this year, TrendForce research states.
Samsung is also benefiting from the rising prices of DRAM processors. Prices in this segment increased by about 23 per cent.
Expectations for HBM processors
Furthermore, the South Korean tech giant also benefits from high demand for high-bandwidth memory (HBM) processors for AI chip use. According to Reuters, increased demand for these processors led to a 34 per cent increase in Samsung shares last quarter.
However, Samsung still lags behind competitor and compatriot SK Hynix in the latter segment. This manufacturer recorded a 122 percent share increase due to the increased demand for HBM processors. Analysts expect Samsung to generate more sales in this segment when the last generation of its HBM processors appears on the market in the third quarter of this year.
In particular, the lack of more robust sales from HBM processors caused Samsung shares to fall 1.3 per cent despite the fine quarterly results.
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