(News Bulletin 247) – The South Korean giant expects a very strong increase in operating profit in the second quarter, thanks to an ever-increasing demand for artificial intelligence. Prospects that are boosting the semiconductor groups listed on the Paris Stock Exchange.

Highly diverse and with many players located at different stages of the production chain, the semiconductor sector is often the subject of cross-readings by the market. This means that investors deduce from the publication of a listed company repercussions for other groups in this industry.

And this Friday, it was the South Korean giant Samsung that took charge of reassuring the market on the state of demand for semiconductors, with the publication of preliminary results for the second quarter.

The world’s largest chip and smartphone maker said its sales are expected to jump 23.3% to 74 trillion won ($53.6 billion) in the April-June period, the strongest quarterly growth since the COVID-19 peaks of 2021, Bloomberg noted.

“The development of AI (artificial intelligence) has boosted demand for high-capacity SSDs (solid-state drives),” Avril Wu, an analyst at Taipei-based research firm Trendforce, told AFP.

That demand pushed average memory chip prices up 15 percent from the previous quarter, according to estimates from Asian research firm CLSA, cited by Bloomberg.

Operating profit multiplied by 15

Which leads Samsung to deliver very good projections for operating profit. The South Korean group plans to multiply its operating profit by 15 compared to the same period of the previous year.

Samsung’s operating profit is expected to reach 10.4 trillion won (6.9 billion euros) between April and June 2024, up from 670 billion won a year earlier. The forecast beats analysts’ average forecast of 8.8 trillion won, according to data from LSEG SmartEstimate cited by Reuters. Final results for the April-June period are expected at the end of July.

On the Seoul Stock Exchange, the South Korean giant closed up 2.96% at 87,100 won, thus approaching its absolute records reached in January 2021. This also brings all the semiconductor groups listed on the Paris Stock Exchange, which also benefit from a favorable cross-reading of the preliminary results revealed by Samsung.

In Paris, STMicroelectronics gained 2.5% this Friday around 10:40 while Soitec and X-Fab gained 5.8% and 5.6% respectively. In Frankfurt, Infineon Technologies gained 2.4% while in Amsterdam ASML rose 1.2%.