Samsung Electronics Boosts Chipmaking Stocks

Samsung Electronics boosted the semiconductor sector with strong AI demand.

Samsung-–-Daily-ChartSamsung – Daily Chart

On the Korean exchange, Samsung edged higher on Monday and will have support at the previous resistance level 86,000.

The world’s largest memory chip maker said in a regulatory filing that its coming earnings release would see a rise in operating profit to 10.4 trillion won ($7.54 billion), up around 1,450% from 670 billion won a year earlier.

According to South Korea’s Yonhap news agency, the number would be 25%. Samsung said sales are expected to rise 23.3% to 74 trillion won.

Demand for advanced chips capable of powering AI systems has soared thanks to the success of ChatGPT and other generative AI products. Semiconductors are South Korea’s leading exports, and they rose to $11.7 billion in March, the highest level in almost two years, according to figures released by the trade ministry.

“The development of AI has driven the demand for high-capacity SSDs,” Taipei-based research firm TrendForce’s analyst Avril Wu said.

Gloria Tsuen, senior credit officer at Moody’s Ratings, said Samsung’s “large reported net cash position continues to support its credit quality.”

Samsung is set to unveil its latest smartphones, equipped with AI features and accessories, on July 10 in Paris. A new health-monitoring “smart ring” will also be released.

However, a negative was also on Monday as workers began a three-day strike for better pay. The National Samsung Electronics Union (NSEU) has around 30,000 members, or a quarter of the firm’s South Korean workforce. The union is pushing for an extra day of annual leave for unionised workers and changes to the employee bonus system. Lee Hyun-kuk, the union’s vice president, said there was a possibility for further strikes if Samsung does not improve its current proposals.

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