Samsung Electronics Unveils Q2 2024 Performance, Showcasing Impressive Achievements

Samsung Electronics announced its financial results for the second quarter of 2024, and the numbers are looking pretty good. The company reported consolidated revenue of KRW 74.07 trillion and operating profit of KRW 10.44 trillion. These impressive figures can be attributed to favorable conditions in the memory market, which led to higher average sales prices. Additionally, the robust sales of OLED panels also contributed to the positive results.

The DS Division, responsible for memory products, saw consolidated revenue of KRW 28.56 trillion and operating profit of KRW 6.45 trillion. The memory market as a whole continued its recovery, driven by strong demand for high-bandwidth memory (HBM), conventional DRAM, and server solid-state drives (SSDs). This increased demand is a direct result of cloud service providers’ ongoing investments in artificial intelligence (AI) and businesses’ growing demand for AI on their own servers.

While PC demand was relatively weak, mobile products saw solid demand thanks to increased orders from Chinese original equipment manufacturers (OEMs). The demand for server applications remained robust, with significant improvements in the second quarter compared to the previous quarter. The company responded to the demand for high-value-added products for generative AI applications.

Samsung strengthened its position in the DDR5 market by mass-producing a 128 GB product based on the industry’s first 1b nanometer (nm) 32 Gb DDR5. This move solidifies their leadership in the market and sets them up for success in the second half of 2024.

Looking ahead, AI servers are expected to play a more significant role in the market as major cloud service providers and enterprises increase their AI investments. The demand for HBM and DDR5, as well as server SSDs, is expected to remain strong. However, this concentration on AI applications may result in constrained supply for cutting-edge products for PCs and mobile devices.

To address this demand, Samsung plans to actively respond by focusing on high-value-added products for AI and increasing the portion of HBM3E sales. They will also prioritize high-density products like server modules based on the 1b-nm 32 Gb DDR5 in server DRAM. For NAND, the company will strengthen the supply of triple-level cell (TLC) SSDs, which are still in high demand for AI applications, and address customer demand for quad-level cell (QLC) products optimized for all applications.

The System LSI Business, responsible for key components like systems on chips (SoCs), image sensors, and display driver ICs (DDIs), saw record-high sales in the first half of the year. The second quarter saw improved earnings due to increased supply of these components for major flagship products. The industry’s first 3 nm technology for wearables has received a positive response, and adoption of SoCs featuring this technology is expected to expand in the second half of the year. The business plans to ensure a stable supply of the Exynos 2500 for flagship models.

The Foundry Business also saw improved earnings, thanks to increased demand across various applications. The number of AI and high-performance computing (HPC) customers doubled compared to the previous year, driven by higher orders for sub-5 nm technology. The business has also distributed the process development kit (PDK) for 2 nm Gate-All-Around (GAA) technology to customers ahead of mass production in 2025. In the second half of 2024, the Foundry Business expects a rebound in mobile demand and continued high growth in demand for AI/HPC applications. They aim to outpace the market’s growth with full-scale mass production of second-generation 3 nm GAA technology.

The MX Business, responsible for smartphones and networks, saw consolidated revenue of KRW 27.38 trillion and operating profit of KRW 2.23 trillion. Overall market demand for smartphones declined sequentially, particularly in the premium segment. However, the Galaxy S24 series achieved double-digit year-on-year growth in both shipments and revenue, demonstrating its continued success. The MX Business recorded double-digit profitability for the entire first half of the year, despite increased costs due to rising component prices.

In the second half of 2024, the MX Business expects overall smartphone demand to increase, driven by growing demand for premium products and the launch of new products with innovative features. Additionally, there is an expected increase in demand for ecosystem products like Tablets, smartwatches, and smart rings. The MX Business plans to focus on revenue growth by expanding sales of flagship smartphones and ecosystem products. They will also ensure solid profitability by optimizing product specifications and pursuing operational efficiencies.

The Visual Display and Digital Appliances businesses reported consolidated revenue of KRW 14.42 trillion and operating profit of KRW 0.49 trillion in the second quarter. The TV market saw an increase in demand, primarily in advanced countries, and a quarter-on-quarter increase due to global sporting events. The Visual Display Business solidified its leadership in the premium market by focusing on strategic products like Neo QLED, OLED, and Lifestyle screens. However, profitability decreased due to higher panel prices and intensified market competition.

In the second half of 2024, the Visual Display Business expects overall market demand to recover further, with growing demand for QLED, OLED, and larger screen TVs. They plan to capitalize on this demand by implementing sales programs centered around premium and large-size TVs. Additionally, they will promote competitive features like AI, security, and design, along with differentiated customer experiences enabled by Samsung SmartThings. The business also aims to reinforce its growth momentum by strengthening its service businesses.

Overall, Samsung Electronics is optimistic about the future and expects continued growth in various sectors. With their focus on AI, high-value-added products, and innovative features, they are well-positioned to meet the demands of the market and maintain their leadership in the industry.

Background Information

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About Samsung: Samsung, a renowned South Korean multinational conglomerate, has established itself as a global leader in various industries, including electronics, technology, and more. Founded in 1938, Samsung's influence spans from smartphones and consumer electronics to semiconductors and home appliances. With a commitment to innovation, Samsung has contributed groundbreaking products like the Galaxy series of smartphones, QLED TVs, and SSDs that have revolutionized the way we live and work.

  

Technology Explained

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DDR5: DDR5 (Double Data Rate 5) is the next generation of memory technology for the computer industry. It is a modern day improvement on earlier DDR technologies, with faster speeds, greater bandwidth and higher capacities. DDR5 enables higher resolution, seamless gaming experiences and faster data transfer rates, making it an ideal choice for high-performance computing and 4K gaming. With its greater RAM compatibility, DDR5 provides faster buffering times and raised clock speeds, giving users an improved overall work system. DDR5 is also optimized for multi-tasking, allowing users to multitask without experiencing a significant drop in performance, increasing the productivity of digital tasks. As an ever-evolving technology, DDR5 is paving the way for the computer industry into a new and powerful era.

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Foundry: A foundry is a dedicated manufacturing facility focused on producing semiconductor components like integrated circuits (ICs) for external clients. These foundries are pivotal in the semiconductor industry, providing diverse manufacturing processes and technologies to create chips based on designs from fabless semiconductor firms or other customers. This setup empowers companies to concentrate on innovative design without needing substantial investments in manufacturing infrastructure. Some well-known foundries include TSMC (Taiwan Semiconductor Manufacturing Company), Samsung Foundry, GlobalFoundries, and UMC (United Microelectronics Corporation).

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HBM3E: HBM3E is the latest generation of high-bandwidth memory (HBM), a type of DRAM that is designed for artificial intelligence (AI) applications. HBM3E offers faster data transfer rates, higher density, and lower power consumption than previous HBM versions. HBM3E is developed by SK Hynix, a South Korean chipmaker, and is expected to enter mass production in 2024. HBM3E can achieve a speed of 1.15 TB/s and a capacity of 64 GB per stack. HBM3E is suitable for AI systems that require large amounts of data processing, such as deep learning, machine learning, and computer vision.

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HPC: HPC, or High Performance Computing, is a type of technology that allows computers to perform complex calculations and process large amounts of data at incredibly high speeds. This is achieved through the use of specialized hardware and software, such as supercomputers and parallel processing techniques. In the computer industry, HPC has a wide range of applications, from weather forecasting and scientific research to financial modeling and artificial intelligence. It enables researchers and businesses to tackle complex problems and analyze vast amounts of data in a fraction of the time it would take with traditional computing methods. HPC has revolutionized the way we approach data analysis and has opened up new possibilities for innovation and discovery in various fields.

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NAND: NAND technology is a type of non-volatile memory that is used in many computer applications. It is a type of flash memory that is used to store data in a non-volatile manner, meaning that the data is not lost when the power is turned off. NAND technology is used in many computer applications, such as solid-state drives, USB flash drives, digital cameras, and memory cards. It is also used in many embedded systems, such as cell phones, tablets, and other consumer electronics. NAND technology is a reliable and cost-effective way to store data, making it a popular choice for many computer applications.

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OLED: Organic light-emitting diode (OLED) technology is a cutting-edge display technology that has revolutionized the computer industry by producing superior image quality and superior energy efficiency. OLED technology works by using organic compounds to create an efficient and flexible light source. This type of technology has enabled thinner and lighter designs as well as improved color range and resolution. OLED technology is currently used in laptop displays and is increasingly used in televisions and mobile devices. Its benefits, such as relatively low power consumption and extraordinary brightness, give a more vivid and more powerful image even in dim areas. OLED technology has also improved computer performance, as its power efficiency passes on to other computer components and leads to extended battery life. OLED technology also features shorter response time and full color reproducibility, making it ideal for fast-paced action games.