Operating profit at Samsung’s semiconductor division rose to more than 220 times its year-earlier level. However, the company warned that memory chip shortages could worsen next year as AI infrastructure expands rapidly.
South Korean technology giant Samsung Electronics on Thursday reported a record operating profit of ₩89.5 trillion (€54 billion) for the April-to-June period, up 56% quarter on quarter and more than 19 times the level recorded a year earlier.
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Based on Samsung’s published rounded figures, the semiconductor business’s operating profit rose to ₩89.2 trillion (€53.8 billion), 223 times its year-earlier level of ₩0.4 trillion (€241 million).
Samsung's semiconductor business benefited from rising chip prices driven by demand for AI servers and increased shipments of advanced high-bandwidth memory chips used to power AI applications. That outweighed an operating loss in its mobile, TV and home appliances division, partly due to higher component costs.
Samsung's quarterly revenue rose 28% quarter on quarter and 130% year on year to ₩171.5 trillion (€103.5 billion), an all-time high. The company said it expects demand for its memory products to remain strong in the second half of the year, driven by the continued expansion of AI infrastructure and the broader adoption of agentic AI. Demand for server chips is expected to accelerate further, keeping the market undersupplied, it said in a statement.
Samsung Electronics reported its results a day after rival SK Hynix also posted record quarterly revenue and operating profit, as the world's two largest memory chipmakers continue to ride the global artificial intelligence boom.
Despite their soaring profits, the companies' shares have fallen sharply this week in South Korea's volatile stock market, where retail investors often drive sharp swings in share prices, as concerns grow over their plans to spend heavily on expanding manufacturing capacity and the prospect of intensifying competition from China.
Chip shortages could worsen
Kim Jaejune, an executive vice-president of Samsung's memory chip division, said the company expects the gap between chip supply and demand to widen further in 2027. He said the shortage was expected to persist into 2028.
Samsung said its first semiconductor fabrication plant in Taylor, Texas, was on track to begin operations this year. The company also plans to break ground on a second factory, which could begin mass production in 2030.
Kim said Samsung has secured long-term chip supply contracts with the world's five largest data centre companies and is close to reaching agreements with five other major businesses. He did not identify any of them, but the Associated Press said the five companies could include Amazon Web Services, Google, Meta, Oracle and Microsoft.
"Despite our efforts to increase production, demand growth is outpacing our efforts," Kim said on a conference call.
Samsung and SK Hynix together produce about two-thirds of the world's memory chips. While the companies have embarked on major investments in semiconductor manufacturing facilities and data centres as South Korea expands its AI ambitions, some analysts say there are growing concerns about whether such massive spending will ultimately generate sufficient returns.
The chiefs of Samsung, SK and South Korean carmaker Hyundai joined President Lee Jae Myung on his San Francisco trip last week, where they announced hundreds of billions of dollars in planned cooperation with major US technology companies, including AI firms OpenAI and Anthropic and chip designers Nvidia and Broadcom. The agreements span chip technologies, data centres and other AI infrastructure.
At a roundtable with foreign media last week, Kim Yong-beom, Lee's chief policy adviser, said the initiatives reflect how global technology companies are rushing to secure long-term partnerships with South Korean chipmakers as they seek reliable supplies of memory chips for AI.
However, the volatility of the companies' share prices and those of other global tech firms shows that investors are shifting their focus from short-term earnings to long-term sustainability, Son In-joon, a semiconductor analyst at South Korea's Eugene Investment & Securities, said in a report this week.
