By Joyce Lee

SEOUL (Reuters) – Samsung Electronics (KS:) is expected to report a 13-fold jump in second-quarter profit from a year earlier as demand for artificial intelligence technology drives a rebound in memory chip prices.

The world’s largest maker of memory chips, smartphones and TVs most likely saw its operating profit rise to 8.8 trillion won ($6.34 billion) in the quarter ended June 30, according to an average of LSEG SmartEstimate estimates from 27 analysts, weighed by those with more precision.

The amount would be Samsung’s highest profit since the third quarter of 2022. By comparison, operating profit was 670 billion won in the second quarter last year.

Results from the tech giant’s key semiconductor unit are likely to continue to improve its second consecutive quarterly profit, with memory chip prices rising from a mid-2022 low to delayed 2023, which was driven by tender demand for gadgets using the chips in the wake of the pandemic.

Analysts say the broad-based recovery in the chip industry is being fueled by a surge in demand for advanced DRAM chips, such as high-bandwidth memory (HBM) chips used in AI chips, as well as chips used in data center servers and gadgets that support AI services.

In the second quarter, memory chip prices rose about 13% to 18% from the previous quarter for DRAM chips used in technology devices and 15% to 20% for NAND Flash chips used for data storage, according to data provider TrendForce.

Samsung’s chip unit’s Q2 operating profit was estimated at 4.6 trillion won, according to an average forecast of 10 analysts. That compares with a loss of 4.36 trillion won in the same period last year.

Analysts say the company’s mobile operating profit in the second quarter compared with a year ago was likely down, despite a similar number of smartphones being launched, due to higher parts costs and higher costs for marketing and developing AI services.

The mobile phone industry is expected to post an operating profit of about 2.2 trillion won, down from a profit of 3.04 trillion won a year earlier, according to an average forecast of 10 analysts.

Samsung is expected to compete with rival Apple (NASDAQ:) at the high end of the market when it launches its latest flagship foldable phones and mobile accessories, including a fresh health-monitoring ring, in Paris on July 10.

(1$ = 1,387.4200 won)