Samsung Forecast demand for electronics synthetic intelligence Some will maintain provide of high-end chips robust and tight, becoming a member of rivals to profit from a strong rebound within the world reminiscence chip market.
An upbeat outlook for the world's largest reminiscence chip maker despatched its shares up 1.Eight % on Tuesday after it reported a greater than 10-fold soar in first-quarter working revenue.
However Samsung shares are down 0.Eight % up to now this yr, lagging behind SK Hynix's 24 % acquire, because it seeks to meet up with its smaller rival in supplying top-end chips akin to high-bandwidth reminiscence (HBM). AI the chief Nvidia.
“We plan to triple the availability of HBM-related chips in 2024 in comparison with final yr,” Jejun Kim, Samsung's vice chairman answerable for the reminiscence division, mentioned on the earnings name.
Samsung mentioned it started mass manufacturing this month of the newest HBM chips to be used in generative AI chipsets referred to as the 8-layer HBM3E. It needs to capitalize on the AI growth that has benefited SK Hynix, which was the only provider of HBM3 chips to Nvidia.
Samsung mentioned it plans to start out making the 12-layer model through the second quarter, and expects the newest HBM3E merchandise to account for two-thirds of its HBM output by the top of the yr.
Analysts mentioned the targets have been aggressive.
Samsung's 8-layer HBM3E seems to be supplying Nvidia, whereas the 12-layer might go to AMD and Nvidia, mentioned Jeff Kim, head of analysis at KB Securities.
“As Samsung's know-how is advantageous for high-stacking, whereas SK Hynix has its benefits in 8-layer, there could also be a break up the place Nvidia will get 12-layer merchandise from Samsung and most 8-layer merchandise from SK Hynix, ” mentioned Kim. .
“Samsung is working onerous to enhance the yield of its 12-layer product.”
Samsung didn’t instantly reply to a request for touch upon its HBM prospects.
Samsung additionally mentioned it’s going to enhance its providing of high-end solid-state drive (SSD) merchandise to fulfill AI server demand, and high-end reminiscence chip provide is predicted to tighten later within the yr attributable to its means to give attention to HBM. Feedback from SK Hynix final week.
Reminiscence chip revenue
The South Korean firm's first-quarter income rose 13 % to KRW 71.9 trillion ($52.14 billion), together with a 96 % soar in reminiscence chip income to KRW 17.49 trillion as a pointy slowdown pushed up costs, thanks partially to a growth in AI.
Working revenue rose to KRW 6.6 trillion in January-March, from KRW 640 billion a yr earlier. It was the corporate's highest working revenue for the reason that third quarter of 2022.
The chip division, traditionally Samsung's money cow enterprise that accounted for two-thirds of its working revenue, posted a revenue of KRW 1.91 trillion within the March quarter from a lack of KRW 4.58 trillion a yr earlier. It was the primary revenue for the reason that third quarter of 2022.
Costs for NAND flash chips used to retailer knowledge rose 23 % to 28 % through the first quarter from the earlier quarter, whereas costs for DRAM chips utilized in tech units rose about 20 %, in accordance with knowledge supplier TrendForce.
Samsung's cell system enterprise reported working revenue of KRW 3.51 trillion within the first quarter, up from KRW 3.94 trillion a yr earlier.
It shipped almost 60 million smartphones through the year-ago quarter however reclaimed its title because the world's high smartphone vendor from Apple, which has been struggling declining gross sales in China.
Rising prices, together with elevated reminiscence chip costs for its flagship Galaxy S24 smartphone launched through the quarter, dented margins.
Samsung mentioned AI features drove gross sales of the S24 telephone, permitting the division to keep up double-digit profitability within the first quarter. About 50 % of customers mentioned they purchased S24 telephones for AI features and 60 % have been utilizing AI features usually, the corporate mentioned.
© Thomson Reuters 2024
