Samsung reports a 10-fold increase in profit as AI drives rebound in memory chip markets

SEOUL, South Korea (AP) — Samsung Electronics on Tuesday reported a 10-fold increase in operating profit for the last quarter as the expansion of artificial intelligence technologies drives a rebound in the markets for computer memory chips.

The South Korean semiconductor and smartphone giant said its operating profit for the Jan-March quarter came in at 6.6 trillion won ($4.8 billion), up from the 640 billion won ($465 million) it earned during the same period last year.

Revenue rose by nearly 13% to 71.9 trillion won ($52 billion), driven by higher prices for memory chips and robust sales of its flagship Galaxy S24 smartphones, the company said.

The company earned 1.91 trillion won ($1.38 billion) in operating profit from its semiconductor business, marking the division’s first quarterly profit since the fourth quarter of 2022, as the chip market continues to recover from a cyclical slump deepened by the COVID-19 pandemic and global trade tensions.

Samsung projected the memory chip market to remain strong in the coming months, driven by the expansion of generative AI technologies, which is increasing the demand for both conventional chips used in servers and advanced chips designed to process AI, including high-bandwidth memory.

“In the second half of 2024, business conditions are expected to remain positive with demand — mainly around generative AI — holding strong, despite continued volatility relating to macroeconomic trends and geopolitical issues,” Samsung said in a statement.

For smartphones, the company will continue to focus on boosting the sales of its flagship device, Galaxy S24, which is built with an array of new features enabled by AI, including live translation during phone calls in 13 languages and 17 dialects.

FILE - The logo of the Samsung Electronics Co. is seen during a media tour at Samsung Electronics' headquarters in Suwon, South Korea, June 13, 2023. Samsung Electronics on Tuesday, April 30, 2024, reported a 10-fold increase in operating profit for the last quarter as the expansion of artificial intelligence technologies drives a rebound in the markets for computer memory chips.(AP Photo/Lee Jin-man, File)

The logo of the Samsung Electronics Co. is seen at its office in Seoul, South Korea, Tuesday, April 30, 2024. Samsung Electronics on Tuesday reported a 10-fold increase in operating profit for the last quarter as the expansion of artificial intelligence technologies drives a rebound in the markets for computer memory chips.(AP Photo/Ahn Young-joon)

A Samsung Group flag, right, and South Korean national flag flutter at the company's office in Seoul, South Korea, Tuesday, April 30, 2024. Samsung Electronics on Tuesday reported a 10-fold increase in operating profit for the last quarter as the expansion of artificial intelligence technologies drives a rebound in the markets for computer memory chips.(AP Photo/Ahn Young-joon)

People walk by an advertisement of Samsung Electronics' Galaxy S24 and S24+ at a subway station in Seoul, South Korea, Tuesday, April 30, 2024. Samsung Electronics on Tuesday reported a 10-fold increase in operating profit for the last quarter as the expansion of artificial intelligence technologies drives a rebound in the markets for computer memory chips.(AP Photo/Ahn Young-joon)

A man walks by Samsung Electronics' shop in Seoul, South Korea, Tuesday, April 30, 2024. Samsung Electronics on Tuesday reported a 10-fold increase in operating profit for the last quarter as the expansion of artificial intelligence technologies drives a rebound in the markets for computer memory chips.(AP Photo/Ahn Young-joon)

LAS VEGAS (AP) — They operate in places like an airport, a resort, and a distribution center, tucked away from the public eye but close enough for easy access. They often emit laughter — and the sound of tumbling blocks, bouncing balls, and meandering tricycles.

They’re child care centers based at workplaces. And in the fraught American child care landscape, they are popping up more frequently.

Skyrocketing child care costs and staffing shortages have complicated arrangements for working parents. Some have left jobs after struggling to find quality care. Employers, in turn, view their entry into the child care realm as both a competitive advantage and a workplace morale booster.

“In the absence of government intervention and investment, a lot of businesses have been stepping up to make sure that their employees can access affordable child care,” says Samantha Melvin, an assistant research professor at the Erikson Institute, an independent graduate school for early childhood education.

This series on how the child care crisis affects working parents — with a focus on solutions — is produced by the Education Reporting Collaborative, a coalition of eight newsrooms, including The Hechinger Report, AL.com, The Associated Press, The Christian Science Monitor, The Dallas Morning News, Idaho Education News, The Post & Courier, and The Seattle Times.

Parents benefiting from child care at their work sites praise its convenience and affordability.

Frances Ortiz, who works in accounting at The Venetian Resort Las Vegas, can’t imagine a better option. She says her 3-year-old daughter has gained independence and language skills — with mom not far away — at the property’s on-site child care center for employees.

“She runs in here,” Ortiz says. “She grabs my badge. She has to open the door for herself.”

In September, the Pittsburgh International Airport added an on-site child care. The center serves children of Allegheny County Airport Authority employees as well as those of select airport workers, such as food and beverage workers, ground handlers, and wheelchair attendants.

Airport officials say the idea stemmed from wanting to bring more women and people of color into the aviation workforce. Plus, the airport sits 17 miles (27 kilometers) outside of downtown Pittsburgh, making child care logistics challenging for employees. So far, it’s operating at about half capacity.

“It’s certainly an important proof point to our team that we mean it when we say that we’re invested in them and in what they need,” says Christina Cassotis, CEO of the Allegheny County Airport Authority, which operates the airport.

Child care costs can eclipse rent or mortgages, if parents can access care in the first place. Many find themselves on waitlists.

Experts caution against an overreliance on businesses filling the void. Philip Fisher, director of the Stanford Center on Early Childhood, says doing so could undercut efforts to recognize child care as a public good.

“There’s a lot of well-intentioned people who are thinking this is a really good idea, and for those who would benefit from it, it could be,” he says. “Again, there are lots of downsides even in the short term.”

One of those potential pitfalls, he says, is instability if a parent suddenly loses their job and then has to find new child care and a new job.

The assistance offered by public and private employers runs the gamut. Some run their own centers. Others outsource the operations and management.

The financial arrangements also differ. Many companies and organizations don’t disclose the exact discounts offered to employees.

Walmart, for instance, recently opened an on-site child care center at its massive Bentonville, Arkansas, campus. The Little Squiggles Children’s Enrichment Center charges a monthly rate of $1,117 to $1,258, based on the child’s age, which company officials tell the Monitor in an email is “at market rate or below regional levels for comparable care.”

Another method gaining steam: employers providing subsidies for families to use toward child care options within their own communities.

KinderCare, a large child care operator with locations nationally, partners with more than 600 businesses and organizations to provide employee-sponsored child care, up from 400 in 2019, says Dan Figurski, president of KinderCare for Employers and Champions. Those employers represent the technology, medical, banking, academic, and public service industries, among others.

In Nevada, The Venetian Resort’s child care center, run by KinderCare, sits in a back-of-house hallway steps away from the Las Vegas Boulevard.

All employees can enroll their children, as long as space allows, at a cost that’s generally 35% to 40% lower than KinderCare’s normal rate, says Matt Krystofiak, the Venetian’s chief human resources officer. The company also offers subsidies for employees who want to enroll their children in an off-site KinderCare closer to their homes.

“We’re doing this because this is what our team members want,” Krystofiak says. “This is what our team members need.”

Some businesses view investments in child care as a reflection of their company culture.

Patagonia's foray into child care began in 1983 when some of the company’s original employees started having children. As the clothing retailer grew, so did its child care footprint. Nowadays, it operates three child care centers — two in southern California and one in Reno, Nevada — serving roughly 200 children.

The company charges employees in each location what leaders describe as an “average market rate.” Subsidies are available based on household income, says Sheryl Shushan, Patagonia’s director of global family services. The child care teachers are employed by Patagonia, so they receive corporate benefits as well.

At the outdoor classroom at Patagonia’s distribution center in Reno, children spend hours digging in sand, riding bikes, playing with water, or climbing natural and human-made objects. Patagonia leaders say the benefits on their end are stronger employee retention, a can-do spirit in the workplace, and a greater sense of community.

For Alyssa Oldham, a classroom manager in Reno, the job and child care benefit meant rethinking her family size. She and her husband originally envisioned being a one-child family, given child care costs.

Now she comes to work with her 4-year-old son and 1-year-old daughter.

“Working here, I was like, ‘We could have another child,’” she says.

Join us Wednesday, May 22, at 3:30 EST for an Education Reporting Collaborative event led by the Seattle Times and AL.com, focused on the child care crisis and how to fix it. Panelists include Sen. Katie Britt (R-Ala.), Sen. Patty Murray (D-Wash.) and Lisa Hamilton, CEO of the Annie E. Casey Foundation. Follow this Facebook event for details.

The Associated Press’ education coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.

A young boy enters the toddler room with his mother at the KinderCare Child Development Center at The Venetian Resort Las Vegas April 18, 2024. (Jackie Valley/The Christian Science Monitor via AP)

Children color at the KinderCare Child Development center on April 18, 2024, in Las Vegas. Just under 100 children of employees were enrolled at the The Venetian Las Vegas' center as of mid-April. (Jackie Valley/The Christian Science Monitor via AP)