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Samsung Electronics officially disclosed its second quarter results.

On July 31, Samsung Electronics released data showing that its operating profit in the second quarter of this year was 10.4439 trillion won (about 54.7 billion yuan), a year-on-year increase of 1462.29%. Sales were 74.07 trillion won (about 388.942 billion yuan), a year-on-year increase of 23.44%.

Thanks to favorable factors such as the recovery in demand for memory chips driven by the expansion of the artificial intelligence (AI) market and rising chip prices, Samsung Electronics' chip division's performance improved significantly, driving overall performance forward.

Specifically, the Digital Solutions (DS) division, which is responsible for Samsung's semiconductor business, had sales of 28.56 trillion won and operating profit of 6.45 trillion won, which was better than market expectations. In the first quarter of this year, the division achieved an operating profit of 1.91 trillion won, returning to profitability after five quarters, and the operating profit growth rate in the second quarter further expanded.

Driven by the generative AI boom, demand for high-value-added products such as high-bandwidth memory (HBM) and DDR5 (DRAM) has increased. Samsung Electronics said: "The sales of server-centric products such as HBM and DDR5 have expanded, and the company has actively responded to the demand for high-value-added products for generative AI servers, which has led to a significant improvement in performance compared to the previous quarter."

Samsung said its HBM second-quarter revenue grew about 50% from the previous quarter. South Korean rival SK Hynix also said last week that demand for AI chips will continue to grow as it posted its highest quarterly profit since 2018.

In the second quarter, Samsung's Device Experience (DX) division had sales of 42.07 trillion won and operating profit of 2.72 trillion won. Among them, the sales of the Mobile Experience (MX) business covering smartphones decreased month-on-month, mainly because the second quarter is the off-season for smartphone sales.

Samsung's MX division (Mobile Experience) and network business posted combined revenue of 27.38 trillion won and operating profit of 2.23 trillion won in the second quarter.

Samsung Electronics said that due to the continued seasonal trend in the smartphone market, the overall market demand for smartphones has continued to decline, especially in the high-end market. Although the revenue of the MX business has continued to decline, the Galaxy S24 series has achieved double-digit year-on-year growth in shipments and revenue in the second quarter and the first half of the year compared with the previous generation.

Samsung expects overall demand for smartphones to increase in the second half of 2024 from the same period last year as demand grows for high-end products with artificial intelligence capabilities and accessories such as smartwatches.