SEOUL: Samsung Electronics on Tuesday (Oct 31) flagged a gradual recovery in demand in 2024 after reporting its highest quarterly profit so far this year, as the battered memory chip market began showing signs of a rebound from a severe downturn.
The proliferation of on-device artificial intelligence (AI) functions will increase the appetite for DRAM chips in premium products in 2024, the world’s biggest memory chip and smartphone maker said in a statement.
“PC (personal computer) and mobile demand is likely to benefit from the arrival of some replacement cycles for products” next year, it added.
The South Korean technology giant said operating profit reached 2.4 trillion won (US$1.78 billion) from July to September. Revenue fell 12 per cent to 67.4 trillion won.
Although profit fell 78 per cent from 10.85 trillion won a year earlier, it was higher than the first quarter’s 640 billion won and the second quarter’s 670 billion won.
Loss in the memory chip business shrank to 3.75 trillion won in the third quarter, versus a 4.36 trillion won loss in the second, as Samsung focused on more profitable advanced chips such as DRAM chips used in AI, while continuing to cut production of older chips.
Manufacturers of smartphones and PCs grappling with weak consumer demand have gradually reduced chip inventories to levels low enough to resume purchases, signalling the end of an industry slump that began last year, analysts said.
Reflecting improving demand, some memory chip prices rebounded toward the end of the third quarter, while in September, overall factory output in South Korea rose for a second consecutive month helped by increasing chip production.