Recently, Samsung has released its forecast for the first quarter of 2024, revealing a projected revenue growth of 11.4%, reaching 71 trillion Korean won (approximately 3806 billion Indian rupees). At the same time, operating profit is expected to increase to 6.6 trillion Korean won (approximately 354 billion dong), a year-on-year growth of 931%.
This strong performance can be attributed to the surge in demand for storage chips and the strong sales of the S24. However, the so-called strong sales of the S24 are merely superficial, and the real reason behind it is the increase in memory prices, which has significantly boosted Samsung's profits.
As the global leader in storage chip manufacturing, Samsung holds approximately 40% market share in the global storage chip market, including DRAM and NAND flash memory, indicating its widespread business presence worldwide.
In 2023, the global storage chip market experienced a collapse, leading to substantial losses for Samsung's storage chip business, totaling 14.9 trillion Korean won (approximately 80.1 billion Chinese yuan). In contrast, in 2022, Samsung Semiconductor earned 23.8 trillion Korean won (approximately 128 billion Chinese yuan), highlighting the unfavorable conditions faced by Samsung's storage business in 2023.
Starting from the fourth quarter of 2024, storage chip prices began to rise, and as the world's largest storage chip manufacturer, Samsung naturally benefited from this trend.
In the first quarter of 2024, memory chip prices experienced a significant increase, with different types of chips seeing varying price hikes ranging from 15% to 25%.
As a result, Samsung's revenue growth in the first quarter of 2024 was not significant, at only 11.4%, but the profit increased by 931%. This was primarily due to the substantial rise in memory chip prices, resulting in increased profits.
According to the projections by JakElectronics, storage chip prices may increase by over 50% by 2024, which gives Samsung the opportunity to recover from the 80 billion Chinese yuan loss incurred in the previous year.
Typically, a cycle for the industry lasts 2-3 years. Therefore, in 2025, Samsung is expected to earn even higher profits and prepare for the next cycle of potential losses. The more Samsung earns during the growth phase, the more it can offset the losses during the downturn.
