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Samsung’s 15-Fold Profit Increase Amid AI Boom, Can They Rival Nvidia’s AI-Driven Market Dominance?

Published July 5, 2024 2:19 PM
Eddie Mitchell
Published July 5, 2024 2:19 PM
Key Takeaways
  • Samsung’s profit projections for 2024 could see the firm become one of the top ten most valuable companies by market cap.
  • The tech giant anticipated profits of around $7.5 billion, a 1,452% increase from 2023.
  • Nvidia and Meta are leveraging Samsung to supply hardware and develop AI chips.

South Korean electronics giant Samsung is anticipating a 15-fold increase in Q2 of 2024 as demand for artificial intelligence (AI) continues to rise.

AI-driven growth has seen computer hardware firms such as Nvidia become some of the most valuable companies on Earth. Can Samsung catch up before the AI bubble bursts?

“15-Fold Growth”

As per a post  from Samsung Electronics, the firm estimates its Q2 2024 profits to leap 15-fold to 10.4 trillion won ($7.54 billion), which is an increase of approximately 1,452% from 670 billion won last year .

Notably, the news follows Samsung’s April 2024 announcement  of a 10-fold increase in profits during the first three months of the year.

Samsung is the world’s largest producer of random access memory (RAM) chips, and demand for AI applications resulted in significantly higher sales of its hardware. That said, whether or not Samsung can sustain this momentum is uncertain, as some leading economists anticipate  the AI bubble to burst anytime now.

Nvidia’s Rise

Perhaps the greatest example of how the AI boom is awarding computer hardware firms with extraordinary profits is NVIDIA.

Last month, the market value of NVIDIA surged past $3 trillion, allowing it to briefly surpass Apple and Microsoft and become the most valuable company on Earth by market cap.

Today, NVIDIA  sits in third place with a market cap of $3.155 trillion. Meanwhile, Samsung sits at 21st with a market cap of $416 billion. Though, if Samsung’s projections are correct, it could soon rise rapidly through the ranks.

Interestingly, NVIDIA is a customer of Samsung, purchasing  high volumes of graphic DRAM on a scale comparable to Apple. However, TSMC  and its development processes are considered superior to Samsung’s, prompting Nvidia to request a new HBM design to keep up with evolving tech.

Competition Heats Up

There are plenty of rumors  about what is next in store for the tech behemoth. Some suggest that Samsung will begin creating its own GPUs and roll them out in 2026. Others hint that the firm intends to make “investments ” into the GPU business.

The demand for AI software and hardware has prompted the likes of Google, Microsoft, and now Meta to enter the AI chip production race. This is yet another major boost for Samsung, as Meta cut ties with TSMC in favor of Samsung for its AI chip development.

Fanning the flames of speculation, Samsung was reported to have accidentally  unveiled a “RISC-V CPU/AI Accelerator” it had been developing. This sparked speculation that it plans to integrate RISC-V architecture into future technologies, including its Mach-1 AI accelerator chip which is due to launch in 2025.

Being one of the world’s leading computer hardware developers, and a major customer  of the world’s leading GPU developers, Samsung finds itself in a unique market position.

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