Samsung Electronics is the largest South Korean company by market capitalization. The history dates back to 1938, when Samsung was established as a small trading company with 40 employees. The fundamental development of the company took place in the 1960s and 1970s, when the then government policy significantly supported the domestic industry, including electrical engineering. In the 1990s, Samsung crossed South Korea's borders, and the company's decisive boom brought the advent of mobile telecommunications technology. Today, Samsung is firmly anchored in the global market not only with smartphones. In the domestic economy, it also plays a leading role in the chemical, financial services, retail, entertainment and pharmaceutical industries.

Last year, Samsung´s revenues decreased by nearly 15 percent under 200 billion USD. Net profit literally collapsed by almost 75 percent close to 11 billion USD. But according to the results for the first quarter of 2024 it seems the company´s revenues and profit starts to recover. For the first three months of 2024 total revenues reached 54.1 billion USD and increased by almost 13 percent. Net income broke the 5billion USD border and increased by 325 percent on the year-on-year basis. Operating income even skyrocketed by 930 percent during the same period in comparison to the previous year.

But investors did not evaluate such a development much. Samsung Electronics stock are only 2,4 percent in the positive territory on the year-to-date basis, and only 12,1 percent up in comparison to the previous year. *

For the on-going months Samsung could benefit of the SSD demand momentum induced by the fast development of AI. Samsung is the world´s largest manufacturer of dynamic random-access memory chips (DRAM), which are commonly fond in a wide range of consumer devices including smartphones and computers.

Samsung expects the second quarter to be driven mostly by demand for generative AI, while mobile demand remains stable. Meanwhile, it expects PC demand to be impacted by slow seasonality, which could lead to customers adjusting inventories before new product launches in the second half of 2024.

„Profitability in Q2 is expected to be down slightly compared to Q1 and Q3, which is when we released new flagship products this year. In response, we’re focusing on cost competitiveness throughout the R&D, manufacturing and sales processes to achieve solid profitability,“ Samsung Electronics said in a statement to the 1Q 2024 financial results.

Samsung Electronics

Source: Samsung Electronics Annual Report 2023

Oleh Shalenyk, financial analyst of Alpho

*1 KRW = 0,00073 USD (27th Jun 2024)

* Past performance is not indicative of future results.