Samsung Electronics Co Ltd (OTC:) will announce its first-quarter earnings this month, and traders ought to eagerly anticipate the outcomes. The South Korean tech big expects its working revenue to develop tenfold in comparison with the earlier yr’s first quarter, reaching 6.6 trillion received ($4.9 billion).

The corporate nonetheless wants to elucidate totally why that is the case, which it is going to seemingly do on the subsequent earnings name.

Nonetheless, many suspect high-bandwidth reminiscence (HBM) chips and their growing demand for creating chips utilized in synthetic intelligence growth to be a significant catalyst behind the reported surge in working revenue.

Samsung Says First-Quarter Earnings Grew by 10x

Surpassing Bloomberg estimates, Samsung’s working revenue is predicted to have grown considerably, reaching 6.6 trillion received. The corporate’s consolidated gross sales are additionally projected to have risen to 71 trillion received from 63.75 trillion received final yr.

The spectacular earnings progress is probably going attributed to extra strong demand for Samsung’s smartphones and different units, notably after the corporate integrated synthetic intelligence throughout most of its product lineup.

Moreover, Samsung’s reminiscence chip enterprise is predicted to have benefited from elevated demand from the AI trade, particularly for high-bandwidth reminiscence (HBM) chips, that are essential for working AI applications. Nvidia (NASDAQ:) selected Samsung to start manufacturing superior HBM chips for its processors.

Samsung More likely to Obtain Billions in US Chips Act Funding with Funding in Texas

To additional solidify its place within the semiconductor trade, Samsung plans to greater than double its funding in Texas to roughly $44 billion.

The funding will give attention to increasing the semiconductor hub in Taylor, Texas, close to Austin. It can embody a brand new chip-making manufacturing facility and a facility for superior packaging, analysis, and growth. The second Taylor-based chip manufacturing facility alone is predicted to value greater than $20 billion.

To help this growth, Samsung is predicted to obtain billions of {dollars} in subsidies from the U.S. Chips Act. Discussions with the Commerce Division are ongoing. An occasion to announce Samsung’s broadened investments is slated for April 15 in Taylor.

Why the Elevated Demand for HBM Chips?

The importance of HBM chips within the period of synthetic intelligence can’t be overstated.

These chips are essential for AI computing as they will velocity up computing instances by stacking a number of DRAM reminiscences on prime of one another and merging them as one. HBM is the popular reminiscence sort to work alongside graphic-unit processors, like these made by Nvidia, that energy AI computing, enabling quicker data-processing speeds.

Main chip makers, together with TSMC, Samsung, and Intel (NASDAQ:), are investing closely in 2.5-D and next-generation 3-D packaging for these chips. Samsung’s deliberate facility for superior packaging, with a projected value of roughly $4 billion, is a essential last step in producing high-end AI chips like these made by Nvidia.

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