Samsung Electronics anticipates a dramatic 15-fold increase in profits for the three months ending June 2024, compared to the same period last year. The surge is driven by the rising prices of advanced chips amid an artificial intelligence (AI) boom, boosting the company’s second-quarter outlook.

The South Korean tech giant, the world’s leading maker of memory chips, smartphones, and televisions, saw its shares rise by more than 2% during early trading hours in Seoul following the announcement.

For the first quarter of this year, Samsung reported a more than tenfold increase in profits. The company now expects its second-quarter profit to reach 10.4 trillion won ($7.54 billion; £5.9 billion), significantly higher than the 670 billion won reported last year and surpassing analysts’ forecasts of 8.8 trillion won, according to LSEG SmartEstimate.

“Skyrocketing demand for AI chips in data centers and smartphones is driving this growth,” said Marc Einstein, chief analyst at Tokyo-based research and advisory firm ITR Corporation.

The broader market rally over the past year, fueled by optimism about AI, has pushed the S&P 500 and the Nasdaq in the United States to new records. Chip-making giant Nvidia’s market value even surpassed $3 trillion last month, briefly becoming the world’s most valuable company.

“The AI boom that significantly boosted Nvidia is also enhancing Samsung’s earnings and those of the entire sector,” Mr. Einstein added.

Samsung Electronics, the flagship unit of South Korea’s Samsung Group, faces a potential three-day strike next week, starting Monday. A union of workers is demanding a more transparent system for bonuses and time off.