• Samsung is estimating its best operating profit since 2022 in the first quarter of 2024.
• The company says it made around $4.89 billion in the quarter, while last year it was announcing some of its worst losses ever.
• A rebounding price of computer chips driven by the AI boom and the performance of the AI-powered Galaxy S24 smartphones are believed to be the leading cause for the shift.

In 2023, Samsung performed almost as poorly in terms of profits as it did during the global financial crisis of 2008. It published a historic loss in July, and in October told investors they should expect profits to continue freefalling – an 80 percent quarterly reduction.

The poor performance was attributed to its computer chip manufacturing business, at one point its highest earning business unit. The section saw a huge fall in demand last year due to a global economic downturn and renewed consumer spending hesitance.

Now it seems things have rebounded for the South Korean manufacturer for its first quarter results.

In its latest earnings guidance, Samsung told investors that it estimated its operating profits would rise more than 10 times what they were in the first quarter of 2023. It said that profits would see approximately 6.6 trillion Won, or $4.89 billion.

This marks an increase of 931 percent from the same time a year earlier, and according to Reuters, would be Samsung’s highest profit since the third quarter of 2022. The enormous shift in luck for the tech giant is being put squarely on to two little letters: AI.

The newly launched Galaxy S24 series of smartphones saw a higher-than-expected margin of sales in the quarter, with onboard AI capabilities from Galaxy AI believed to be the winning addition. In our testing, Galaxy AI provides a few neat little enhancements, but the technology still has a far ways to go before reaching the levels offered by AI leaders like OpenAI.

But the leading change in Samsung’s profitability was an industry-wide rebound in computer chip prices due to an AI-powered boom in the market. A boom led by NVIDIA, who spent 2023 crowning itself as the AI processor king, and this year launched its biggest, baddest generative AI-powered piece of silicon in the Blackwell.

Unfortunately for Samsung, the rebounding profits were unable to sway investors, and shares were down 1.3 percent on Friday morning, though they have been performing a little better since then.

[Image – Photo by Babak Habibi on Unsplash]