Samsung Electronics, the world’s largest maker of memory chips and smartphones, has posted a staggering 15-fold year-on-year surge in operating profit to A$11.11 billion (10.4 trillion won) in the June quarter.

The company’s sales grew around 23 per cent, the steepest rise since Covid-era highs recorded in 2021.

The A$237 billion memory chip market is seeing a resurgence with a boom in data centres and AI development pushing the average memory chip prices up 15 per cent higher compared to the previous quarter, according to CLSA estimates. With a boom in demand, excess chip inventory has also been eliminated.

Samsung’s competitors in the chip market such as SK Hynix have been directing production capacity toward high-bandwidth memory (HBM).

(Image: Sourced from Samsung Semiconductor Website)

Those chips drive generative artificial intelligence which is being developed by tech majors such as Apple, Microsoft, Meta, Alphabet, and OpenAI, among others.

Samsung has fallen behind in HBM development, according to media reports. Sales of those generative AI chips are dependent on Nvidia which has almost monopolised the design and development of those chips and uses HBM in its graphic processing units, reported Nikkei Asia.

SK Hynix and US-based Micron Technology had reportedly begun shipping HBM3E to Nvidia. Samsung has yet to clear a Nvidia certification.

The South Korean company has even launched a department specialising in HBM earlier this month and will work on R&D of next-generation products including the HBM4. Recently, it began recruiting 800 engineers and others with experience in semiconductor design and development.

Samsung’s vice chairman Jun Young-hyun was also appointed as chief of Samsung’s device solutions division which is in charge of the company’s memory, system and foundry semiconductor businesses.