Samsung Electronics anticipates a remarkable 15-fold increase in profits for the quarter ending June 2024 compared to the same period last year. This surge is attributed to the booming demand for advanced chips driven by the rise of artificial intelligence (AI), which has positively impacted chip prices and, consequently, the company's forecast for the second quarter.

As the world’s largest manufacturer of memory chips, smartphones, and televisions, the South Korean tech giant saw its shares rise by over 2% in early trading in Seoul following the announcement. This follows a significant more than tenfold increase in profits reported for the first quarter of this year. For the current quarter, Samsung expects profits to reach 10.4 trillion won ($7.54 billion; £5.9 billion), up from 670 billion won last year, surpassing analysts' predictions of 8.8 trillion won, according to LSEG SmartEstimate.

Marc Einstein, chief analyst at Tokyo-based ITR Corporation, noted the skyrocketing demand for AI chips in data centers and smartphones. This demand is a key factor behind the broader market rally over the past year, which saw the S&P 500 and Nasdaq in the United States reach new records. Nvidia, another chip-making giant, briefly became the world's most valuable company last month, with its market value surpassing $3 trillion.

Einstein emphasized that the AI boom, which significantly boosted Nvidia's earnings, is also benefiting Samsung and the entire sector. Samsung Electronics, the flagship unit of the South Korean conglomerate Samsung Group, is also facing a potential three-day strike starting Monday. The strike, organized by a workers' union, demands a more transparent system for bonuses and time off.