Samsung Electronics, the South Korean tech giant, reported an unprecedented operating profit of 89.5 trillion won ($62 billion) for Q2, fueled mainly by soaring demand for semiconductors powering AI infrastructure. Despite this historic surge, their shares fell sharply amid investor worries over aggressive capacity expansion plans and rising competition from China. Samsung’s chip division led the growth thanks to higher prices and shipments of advanced memory chips for AI servers, outweighing losses in mobile and home appliance sectors. The company anticipates continued strong demand for AI-related memory products through the second half of 2024, supported by long-term supply deals with global data center giants. Meanwhile, Samsung and peer SK Hynix together dominate about two-thirds of the global memory chip market and recently outlined a massive $554 billion investment to strengthen South Korea’s position as an AI semiconductor hub. However, concerns remain over whether this hefty spending will generate sufficient returns amidst ongoing market volatility and competitor pressures from China’s emerging chip technologies.
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