Samsung Electronics, the flagship subsidiary of South Korean tech giant Samsung Group, expects its profits in the second quarter of this year to jump by almost 1500% compared to the same period last year. This follows an unprecedented 10-fold increase in their profits in the first quarter of this year driven by the surging demand for advanced chips that power artificial intelligence.
The tech conglomerate is the world’s largest manufacturer of memory chips, televisions and smartphones. During the second quarter of this year, it expects its profits to rise by $7.54 billion in an announcement that pushed Samsung shares up by more than 2% on the Seoul stock exchange. Marc Einstein, chief analyst at the Tokyo-based research and advisory firm ITR Corporation said, “right now we are seeing skyrocketing demand for AI chips in data centers and smartphones”.
Similarly, Nvidia is another company riding the AI fad in its instrumental role as a manufacturer of semiconductors, a crucial component in the hardware behind artificial intelligence. In fact, the market value of the chip-producing giant surged past $3 trillion last month, surpassing Apple and Microsoft to briefly hold the position of the worlds most valuable company.
Limitations in the supply of various components needed to power artificial itelligence such as semiconductors and GPUs have drastically increased the price of them and have been a source of contention among countries. Most notably, the US and China are engaged in an escalating trade war aimed at curbing each others access to modern technologies. In the past month, the share prices of the two major semiconductor manufacturers, Taiwan Semiconductor Manufacturing Company (TSMC) and Intel, have risen by over 12% in a reflection of the booming demand and tight supply this industry suffers from.
Written by Rakan Pharaon
