Samsung hits record $62B profit on AI chip demand but warns memory shortage worsens through 2028

Samsung Expects the Chip Shortage to Get Worse Before It Gets Better - CNET

Dashia is the consumer insights editor for CNET.... Read full bio Don't expect lower prices on tech anytime soon. That's the takeaway from what Samsung execs said on the company's second-quarter earnings call Thursday. The company expects the memory chip shortage behind rising tech prices to continue through 2028. The RAM shortage, sometimes dubbed RAMageddon, is driven by high demand for memory (and low supply) driven by the rapid growth of AI and demand for the chips that power all those data centers. That means the chips for your devices like laptops and smartphones are costing manufacturers more. Jaejune Kim, Samsung's executive vice president of memory, broke down what the supply and demand in the memory market means for Samsung in the Q2 earnings call. Kim said that the rapid adoption of agentic AI has led to increased demand and use of AI servers and overall computing. And AI frontier model developers are struggling to get enough cloud capacity. Other factors are affecting memory supply and demand, including AI developers seeking to meet their memory needs through Samsung -- even aiming for multiyear supply agreements where possible. That means the company has a sense of the longer-term demand for memory. "So we believe it will be unlikely to see any significant increase in incremental supply through 2028. Based on the incoming requests that we have been seeing from the customers, unmet demand from this year is likely to carry over into the following year, contributing to tighter supply conditions going forward. The supply constraints are expected to become even more severe in 2027 than 2026, reinforcing our view that the supply shortage will persist through 2028," said Kim. Thinking beyond into 2029 is hard to say due to limited visibility, Kim added. Daniel Araujo, Samsung's vice president of mobile experience, said the demand for AI servers is also driving the mobile memory shortage and the resulting high prices. That demand won't slow down anytime soon, either. Samsung hopes that sales from the S26 series and new premium products, such as the Tab S12 foldable series and the Watch Ultra 2, will boost profits. Samsung didn't say whether we should expect higher prices in the future, but some new products revealed at Samsung Unpacked already cost more than earlier models, like the $1,200 Galaxy Z Fold 8. The memory chip shortage has already led to other big-name tech companies, including Apple and Microsoft, to increase prices on new and existing products.

Samsung warns memory crunch will last through 2028 as profit rises 19-fold

Samsung Electronics is warning that the current memory supply crunch will deepen next year and persist through 2028, a shortage that keeps padding its own record profits at the expense of enterprise customers and consumers. The Korean conglomerate said agentic AI has added to demand already generated by model training, driving an "unprecedented rise" in requirements for AI servers and other computing infrastructure. Memory makers continue to prioritize production of components for AI servers, leading to a shortfall of the mainstream memory types needed for PCs, smartphones, and other devices. The industry continues to invest in new capacity, but the lead time from starting construction of a fab to producing wafers exceeds three years, according to Samsung's EVP of Memory, Jaejune Kim, meaning that any significant ramp in supply capacity will take considerable time. "So we believe it will be unlikely to see any significant increase in incremental supply through 2028," Kim told analysts on a call to discuss the firm's calendar Q2 financial results for the period ended June 30. "Based on the incoming requests that we have been seeing from the customers, unmet demand from this year is likely to carry over into the following year, contributing to tighter supply conditions going forward. The supply constraints are expected to become even more severe in 2027 than 2026, reinforcing our view that the supply shortage will persist through 2028." Kim said visibility further ahead is limited, although rising token processing by AI agents is expected to keep pressure on memory chip demand over the medium to long term. Like rival SK Hynix, Samsung has also cut deals with customers to ensure long-term supply stability. "Customers who want to secure substantial AI service infrastructure are increasingly approaching us for multiyear supply," Kim told analysts. "These multiyear arrangements actually are aligned with our objective of hedging our mid- to long-term risk. And so we have been engaging in discussions with customers, prioritizing those who can guarantee committed future captive demand." In other words, customers willing to sign up for years of memory purchases move to the front of the queue. Everyone else can take a number and get in line. Samsung hopes the agreements will reduce its exposure to the memory market's boom-and-bust cycles. It expects output, measured in bits, to grow by the mid-single digits for DRAM and the high single digits for NAND flash next quarter. It will aim to expand sales of high-performance products including HBM4, HBM4E, DDR5, SOCAMM2, and enterprise SSDs, Kim said. This approach led to Samsung reporting revenue of ₩171.5 trillion ($119 billion) for Q2, up 130 percent year-on-year. Operating profit shot up more than nineteen times the year-ago figure to ₩89.5 trillion ($62.4 billion). Taiwan-based market watcher TrendForce agrees that AI will remain a primary driver of DRAM demand in 2027, but expects to see supplies of NAND flash ease in the second half of the year as new production capacity comes online. For DRAM, several suppliers plan to start new lines in 2027, but construction schedules, equipment installation, and other requirements will delay meaningful production ramp-ups until the second half of 2027, the firm says, so substantial extra output is not expected to materialize until 2028. In contrast, accelerated migration to NAND products with more layers and the gradual ramp-up of new fabrication plants during 2027 is expected to drive greater bit supply growth than in 2026, resulting in an expansion of industry output. ®

Samsung Q2 profit jumps 19-fold as AI chip demand offsets mobile loss

SEOUL, July 30 (Reuters) - Samsung Electronics (005930.KS), opens new tab said on Thursday its operating profit jumped 19-fold to a record in the second quarter, as solid demand for AI chips offset ⁠weaker earnings at its mobile business. The world's top memory chipmaker reported operating profit of 89.5 trillion won ($61.98 billion) for the April-to-June period, in line with its ⁠estimate of 89.4 trillion won and up from 4.68 trillion won a year ⁠earlier. The South Korean company's revenue rose 130% to 171.5 trillion ⁠won in the quarter from a year ⁠earlier. ($1 = 1,444.0800 won) Reporting by Hyunjoo Jin and Joyce Lee; Editing by Sonali Paul Our Standards: The Thomson Reuters Trust Principles., opens new tab

Samsung's mobile division posts first-ever loss due to soaring memory prices - Engadget

How can one of the world's largest smartphone companies lose money by selling more smartphones than ever? I think we all know the answer: soaring memory prices caused by the AI boom. Samsung just announced that despite "solid" smartphone sales and growing revenue, its DX division (which includes mobile) posted its first-ever loss of 800 billion won ($544 million) in the company's second fiscal quarter. "Although MX (Mobile eXperience) saw revenue growth year-over-year driven by solid sales of flagship products centered on the Galaxy S26 series and strong sales of the A series, operating profit decreased due to increased cost burdens across the industry, such as rising component costs," the company said. (The DX division also includes TVs and appliances, but the loss was primarily in the mobile MX category.) Samsung emphasized that flagship-level products like the Galaxy S26 Ultra and Galaxy Z Fold 8 series performed well, profit-wise. However, budget phones struggled to show a profit due to higher component costs and already-thin margins (Samsung foreshadowed this possibility back in April). As a result, the company plans to focus on "high-value-added products" in order to drive growth in future quarters. With all that, consumers can expect higher smartphone prices across all categories from Samsung and other brands. This inflation will hit low-income buyers the hardest, as prices for smartphones in the $200-500 category will likely rise the most, percentage-wise. Samsung, of course, has a huge advantage over most manufacturers, as it also manufactures the memory and storage components used in smartphones. In that area, the company absolutely smashed it this quarter. "The Device Solutions (DS) Division posted a [quarter-on-quarter] sales increase of 56 percent, with the Memory Business setting an all-time high for quarterly revenue and operating profit," Samsung wrote. Overall, Samsung posted a record 171.5 trillion ($119 billion) won in consolidated revenue (up 28 percent from last year), an all-time quarterly high. Operating profit also hit an all time high of 89.5 trillion ($62.2 billion). "Earnings per share for both common and preferred shares increased by 52 percent to... among the highest levels for global tech companies," Samsung added. With all that money rolling in and shareholders happy, that puts less pressure on its mobile division -- unless the AI bubble bursts, of course.

Samsung reports record profit as South Korean chip giants benefit from global AI boom

SEOUL, South Korea (AP) -- South Korean technology giant Samsung Electronics on Thursday reported a record operating profit of 89.5 trillion won ($62 billion) for the April-June period, a day after crosstown rival SK Hynix also reported record earnings, 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 massively on increasing manufacturing capacity and the prospects of intensifying competition from China. Samsung's second-quarter operating profit was a more than 19-fold increase from a year earlier, and nearly all of it came from its semiconductor business, which 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 of 171.5 trillion won ($119 billion) was also 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 continued expansion of AI infrastructure and broader adoption of agentic AI. Demand for server chips is expected to accelerate further, keeping the market undersupplied, it said in a statement. Samsung's report came a day after SK Hynix also reported a record second-quarter revenue of 60.5 trillion won ($42 billion). However, SK Hynx's profit was still below the loftier market expectations and the company's shares declined by more than 9% on Monday. Samsung's share prices have also declined this week. While Samsung and SK Hynix have embarked on major investments in semiconductor manufacturing facilities and data centers as South Korea expands its AI ambitions, some analysts say there are growing concerns about whether such massive spending will ultimately generate sufficient returns. Shares of South Korean chipmakers have also been pressured by concerns over intensifying competition from China, with reports that a state-owned Chinese company had begun mass-producing domestically developed immersion deep-ultraviolet (DUV) lithography machines, a key technology for advanced chipmaking. Investor concerns were also heightened by the strong stock market debut of Chinese memory chipmaker ChangXin Memory Technologies, some analysts say.

Samsung locks in years of chip supply as shortages are expected to persist to 2028

Serving tech enthusiasts for over 25 years. TechSpot means tech analysis and advice you can trust. Forward-looking: Samsung Electronics is locking in long-term chip orders as AI-driven demand continues to exceed available production, and the company expects those constraints to persist for years. Shortages are likely to deepen in 2027 and carry into 2028, Jaejune Kim, executive vice president of Samsung's memory business, told analysts. To manage that imbalance, Samsung has signed long-term supply agreements with the five largest global data center operators and is close to finalizing deals with five more. Kim said those contracts will run for at least five years and account for 60% to 70% of the company's future capacity. The agreements include upfront payments and floor pricing, giving Samsung more predictability as it invests heavily in advanced chip production. The approach reflects how AI infrastructure is changing the memory market. Large cloud and data center companies are no longer relying on short-term purchasing cycles. Instead, they are securing guaranteed access to key components, particularly high-bandwidth memory, or HBM. Samsung's comments come after a period of volatility for chip stocks, driven by concerns about whether AI spending can hold up and how competition from China could affect pricing. Even so, analysts viewed the company's outlook as a positive signal. "Management's commentary on the conference call was better than expected, and it was one of the more reassuring calls we've heard in quite some time," Ryu Young-ho, a senior analyst at NH Investment & Securities, told Reuters. The company's latest earnings show how strong that demand has been. Samsung's semiconductor division posted an operating profit of 89.2 trillion won ($61.7 billion) in the second quarter, up more than 250 times from a year earlier. Overall operating profit for the quarter reached 89.5 trillion won, while revenue rose 130% to 171.5 trillion won. Image credit: Reuters Those gains are being driven by higher memory prices tied to AI demand, but they are also creating pressure inside the company. Samsung's mobile division reported a 700 billion won loss, its first quarterly loss. "The chips enriching one side of Samsung are now hurting the other, leaving the group more exposed than ever to memory pricing and the durability of hyperscaler demand," said Josh Gilbert, an analyst at eToro. A big part of Samsung's push is centered on HBM, which is used alongside AI processors from companies such as Nvidia and AMD. The company said it expects HBM4 revenue to more than triple in the third quarter. That growth could help Samsung close the gap with SK Hynix and bring its share of the HBM market closer to its overall DRAM share later this year. Samsung is also working to expand its manufacturing capacity. Its foundry business, which competes with TSMC and Intel, is expected to improve as utilization rates rise and pricing remains strong. The company said its Taylor, Texas fab is on track to begin operations this year, with plans for a second facility that could start mass production in 2030. Rival SK Hynix also reported strong results this week and said it plans to increase capital spending by about 50% to meet AI demand. Despite that competition, Samsung signaled it is comfortable with its financial position. CFO Park Soon-cheol said the company does not plan to issue American depositary receipts following SK Hynix's recent US listing, citing steady cash generation from its existing businesses.

Samsung posts record $62 billion profit -- and investors sell off anyway | Fortune

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 massively on increasing manufacturing capacity and the prospects of intensifying competition from China. Samsung's second-quarter operating profit was a more than 19-fold increase from a year earlier, and nearly all of it came from its semiconductor business, which 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 of 171.5 trillion won ($119 billion) was also 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 continued expansion of AI infrastructure and broader adoption of agentic AI. Demand for server chips is expected to accelerate further, keeping the market undersupplied, it said in a statement. Samsung's report came a day after SK Hynix also reported a record second-quarter revenue of 60.5 trillion won ($42 billion). However, SK Hynx's profit was still below the loftier market expectations and the company's shares declined by more than 9% on Wednesday. Samsung's share prices have also declined this week. Kim Jaejune, an executive of Samsung's memory chip division, said the company expects the gap between chip supply and demand to widen further in 2027. He said Samsung plans to begin construction of its second semiconductor fab in Taylor, Texas, before the end of this year, with the goal of starting production by 2030. Kim said Samsung has secured long-term chip supply contracts with what he called the "five major global data center clients" -- a possible reference to Amazon Web Services, Google, Meta, Oracle and Microsoft -- and is in talks with other major technology companies as demand for AI infrastructure surges. "Despite our efforts to increase production, demand growth is outpacing our efforts," he said in 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 centers as South Korea expands its AI ambitions, some analysts say there are growing concerns about whether such massive spending will ultimately generate sufficient returns. Shares of South Korean chipmakers have also been pressured by concerns over intensifying competition from China, with reports that a state-owned Chinese company had begun mass-producing domestically developed immersion deep-ultraviolet (DUV) lithography machines, a key technology for advanced chipmaking. Investor concerns were also heightened by the strong stock market debut of Chinese memory chipmaker ChangXin Memory Technologies, some analysts say. Samsung and SK Hynix last month announced plans to invest a combined 800 trillion won ($554 billion) in a new chipmaking hub in the country's southwest to capitalize on surging AI-driven demand. The chiefs of Samsung, SK and South Korean automaker 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 U.S. technology companies, including AI firms OpenAI and Anthropic and chip designers Nvidia and Broadcom. The agreements span chip technologies, data centers and other AI infrastructure. In 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' stock prices, along with 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 Securities, said in a report this week.

Samsung operating profit up 1,800% in second quarter on AI boom

Seoul (AFP) - South Korean technology giant Samsung Electronics posted on Thursday a massive 19-fold jump in second-quarter operating profit from last year, buoyed by sustained AI-driven demand for memory chips. Samsung and other leading memory chipmakers have seen profits skyrocket in 2026, but their share prices have proven volatile as investors question whether the AI-boom has gone too far. The world's largest memory chipmaker posted April-June operating profit of 89.49 trillion won ($62 billion) -- up 1,813.8 percent on-year, the company said in a regulatory filing. The firm posted revenue of 171.49 trillion won, up 130 percent from a year earlier. Its net profit soared 1,299.9 percent on-year to 71.62 trillion won, it said. These earnings met market expectations, South Korea's Yonhap news agency said, citing its own financial data firm. The boom results were posted despite South Korean stocks suffering a sharp sell-off on Wednesday as nervous traders unwound AI-driven bets, fretting whether lofty profit forecasts are realistic. Samsung fell more than 12 percent, while its main domestic rival SK hynix tumbled nearly 20 percent after 14 percent losses the day before -- halving its value from record highs last month. SK hynix's second quarter operating profit and revenue posted Wednesday came in below expectations, even as net profit soared a forecast-beating 1,242 percent. Samsung Electronics, SK hynix and US firm Micron are the world's three leading manufacturers of high-bandwidth memory (HBM) chips used in AI processors to generate chatbot responses and realistic images. Samsung said in a statement that its memory business "achieved another record-breaking quarter" by proactively addressing AI demand with a primary focus on server products. "The continued industry-wide upward trend of prices also contributed to the record earnings," the company said. Looking ahead to the second half, the firm said it expects robust server demand, driven by continued AI infrastructure spending and the wider adoption of agentic AI -- a system that autonomously performs tasks across workflows to boost productivity. Analysts say the firms' boom is likely to continue as North American tech giants ramp up investment in AI data centres requiring their cutting-edge chips. AI expansion has also pushed up prices and shipments of conventional NAND and DRAM memory chips to Samsung's advantage, analysts say. The company's HBM business is also "driving a significantly positive impact on their foundry business as well", MS Hwang, an analyst at investment firm Counterpoint, told AFP. "In short, Samsung is leveraging its strong position in memory to aggressively capture share across most of its business units." - 'The biggest risk' - Over the weekend, Samsung announced it would pursue a "strategic collaboration" for the "supply of industry-leading memory solutions, including HBM" -- supporting US chipmaker Broadcom's next-generation AI accelerators. The partnership is estimated to exceed $200 billion over the next five years through 2030. Analysts say the move could be seen as Samsung's effort to find an AI memory customer base beyond Nvidia, which has long relied on SK hynix for HBM. "Samsung's ability to supply HBM to Nvidia is, in my view, somewhat constrained," Joo Won, head of the economic research division at Hyundai Research Institute, told AFP. "Since it hasn't been able to make meaningful inroads into SK hynix's market share, it appears to be shifting its focus to other areas." The semiconductor boom has boosted South Korea's tax revenue, prompting President Lee Jae Myung to describe it as a "golden window" to invest in AI and semiconductor industries. Seoul has confirmed plans for Samsung and SK hynix to invest a combined 800 trillion won in building four advanced semiconductor fabrication plants at a former military airport site in Gwangju. The Gwangju fab is a "long-term project that will take considerable time to materialise," said analyst Joo. "The biggest risk is that the semiconductor supercycle could be over by the time it's ready, leaving the industry facing weaker earnings."

Samsung profit surges 1,814% as AI chip demand soars

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. 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.

Samsung's stock rises on explosive operating profit growth

Samsung Electronics Co. Ltd. today confirmed its earlier expectation that runaway memory chip prices will drive a massive 19-fold jump in operating profit, as robust artificial intelligence demand continues to accelerate momentum in its semiconductor business. The company just announced its full first-quarter results, saying it delivered total revenue of 171.5 trillion won (around $118.56 billion), up 130% but trailing the analyst consensus estimate of 172.65 trillion. However, the slight shortfall in sales was made up for by Samsung's profitability, which exceeded expectations. The company reported an operating profit of 89.5 trillion won during the quarter, up a staggering 1,814% from the same period one year earlier and ahead of the 88.13 trillion won forecast. Samsung's stock was up more than 5% during the early trading session in South Korea Thursday morning. Samsung said its chipmaking business was the key growth driver during the quarter, recording a record operating profit of 89.2 trillion won, meaning it accounted for virtually all of its profit. Runaway AI server demand was the main reason for those record-breaking numbers, helping Samsung to register all-time high sales of both dynamic random-access memory and NAND flash chips, which are both key components in those products. Samsung said it's also making progress in terms of its new high-bandwidth memory products, with sales of its HBM4 chips scaling up during the quarter. It also shipped the first samples of its upcoming HBM4E products to major customers. HBM4 is the company's sixth-generation high-bandwidth memory chip, and has been specifically designed to work with high-powered AI processors such as Nvidia Corp.'s graphics processing units. HBM4E is an enhanced, faster and more energy-efficient version of the HBM4, which offers around 20% greater throughput and can be installed in denser configurations to support much larger clusters of AI chips. For the second half of the year, Samsung believes that demand for its HBM chips from AI server makers is going to increase, due to broader enterprise adoption of "agentic" AI workloads and continuing capital expenditure increases from the world's biggest cloud infrastructure firms. The company also sees demand escalating for its server DRAM and solid-state storage devices this year, due to the growing needs of the AI industry. Samsung's DRAM chips are used not only in AI servers, but also devices such as smartphones and personal computers, while SSDs are high-performance storage devices designed to transfer data rapidly. They have become critical to AI infrastructure. While Samsung is undoubtedly benefiting from the insane growth of its chipmaking business, it is coming at the expense of profitability in its other key business segments. Its smartphone and home appliance businesses both recorded modest operating losses during the second quarter, as they're being forced to bear the burden of those higher chip prices. Last week, Samsung unveiled a slate of new devices that it hopes will be able to turn things around in the smartphone division, including new foldable smartphones. It also announced an expanded strategic collaboration with another chipmaker, Broadcom Inc., which spans memory and foundry technologies. Samsung's chief rivals right now include SK hynix Inc., another South Korean memory chipmaker that recently debuted on the U.S. stock markets, and Micron Technology Inc. SK hynix also reported record-breaking profits this week while just missing analyst's estimates.

Samsung reports billions in record profit for Q2 thanks to AI boom

The chip giant announced $62 billion in earnings for the April-June period. South Korean technology giant Samsung Electronics on Thursday reported a record operating profit of 89.5 trillion won ($62 billion) for the April-June period, a day after crosstown rival SK Hynix also reported record earnings, 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 massively on increasing manufacturing capacity and the prospects of intensifying competition from China. Samsung's second-quarter operating profit was a more than 19-fold increase from a year earlier, and nearly all of it came from its semiconductor business, which 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 of 171.5 trillion won ($119 billion) was also 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 continued expansion of AI infrastructure and broader adoption of agentic AI. Demand for server chips is expected to accelerate further, keeping the market undersupplied, it said in a statement. Samsung's report came a day after SK Hynix also reported a record second-quarter revenue of 60.5 trillion won ($42 billion). However, SK Hynx's profit was still below the loftier market expectations and the company's shares declined by more than 9% on Wednesday. Samsung's share prices have also declined this week. Kim Jaejune, an executive of Samsung's memory chip division, said the company expects the gap between chip supply and demand to widen further in 2027. He said Samsung plans to begin construction of its second semiconductor fab in Taylor, Texas, before the end of this year, with the goal of starting production by 2030. Kim said Samsung has secured long-term chip supply contracts with what he called the "five major global data center clients" -- a possible reference to Amazon Web Services, Google, Meta, Oracle and Microsoft -- and is in talks with other major technology companies as demand for AI infrastructure surges. "Despite our efforts to increase production, demand growth is outpacing our efforts," he said in 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 centers as South Korea expands its AI ambitions, some analysts say there are growing concerns about whether such massive spending will ultimately generate sufficient returns. Shares of South Korean chipmakers have also been pressured by concerns over intensifying competition from China, with reports that a state-owned Chinese company had begun mass-producing domestically developed immersion deep-ultraviolet (DUV) lithography machines, a key technology for advanced chipmaking. Investor concerns were also heightened by the strong stock market debut of Chinese memory chipmaker ChangXin Memory Technologies, some analysts say. Samsung and SK Hynix last month announced plans to invest a combined 800 trillion won ($554 billion) in a new chipmaking hub in the country's southwest to capitalize on surging AI-driven demand. The chiefs of Samsung, SK and South Korean automaker 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 U.S. technology companies, including AI firms OpenAI and Anthropic and chip designers Nvidia and Broadcom. The agreements span chip technologies, data centers and other AI infrastructure. In 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' stock prices, along with 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 Securities, said in a report this week.

Samsung reports record profit as South Korean chip giants benefit from global AI boom

SEOUL, South Korea (AP) -- South Korean technology giant Samsung Electronics on Thursday reported a record operating profit of 89.5 trillion won ($62 billion) for the April-June period, a day after crosstown rival SK Hynix also reported record earnings, 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 massively on increasing manufacturing capacity and the prospects of intensifying competition from China. Samsung's second-quarter operating profit was a more than 19-fold increase from a year earlier, and nearly all of it came from its semiconductor business, which 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 of 171.5 trillion won ($119 billion) was also 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 continued expansion of AI infrastructure and broader adoption of agentic AI. Demand for server chips is expected to accelerate further, keeping the market undersupplied, it said in a statement. Samsung's report came a day after SK Hynix also reported a record second-quarter revenue of 60.5 trillion won ($42 billion). However, SK Hynx's profit was still below the loftier market expectations and the company's shares declined by more than 9% on Monday. Samsung's share prices have also declined this week. While Samsung and SK Hynix have embarked on major investments in semiconductor manufacturing facilities and data centers as South Korea expands its AI ambitions, some analysts say there are growing concerns about whether such massive spending will ultimately generate sufficient returns. Shares of South Korean chipmakers have also been pressured by concerns over intensifying competition from China, with reports that a state-owned Chinese company had begun mass-producing domestically developed immersion deep-ultraviolet (DUV) lithography machines, a key technology for advanced chipmaking. Investor concerns were also heightened by the strong stock market debut of Chinese memory chipmaker ChangXin Memory Technologies, some analysts say.

Samsung Reports Record Profit as South Korean Chip Giants Benefit From Global AI Boom

SEOUL, South Korea (AP) -- South Korean technology giant Samsung Electronics on Thursday reported a record operating profit of 89.5 trillion won ($62 billion) for the April-June period, a day after crosstown rival SK Hynix also reported record earnings, 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 massively on increasing manufacturing capacity and the prospects of intensifying competition from China. Samsung's second-quarter operating profit was a more than 19-fold increase from a year earlier, and nearly all of it came from its semiconductor business, which 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 of 171.5 trillion won ($119 billion) was also 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 continued expansion of AI infrastructure and broader adoption of agentic AI. Demand for server chips is expected to accelerate further, keeping the market undersupplied, it said in a statement. Samsung's report came a day after SK Hynix also reported a record second-quarter revenue of 60.5 trillion won ($42 billion). However, SK Hynx's profit was still below the loftier market expectations and the company's shares declined by more than 9% on Monday. Samsung's share prices have also declined this week. While Samsung and SK Hynix have embarked on major investments in semiconductor manufacturing facilities and data centers as South Korea expands its AI ambitions, some analysts say there are growing concerns about whether such massive spending will ultimately generate sufficient returns. Shares of South Korean chipmakers have also been pressured by concerns over intensifying competition from China, with reports that a state-owned Chinese company had begun mass-producing domestically developed immersion deep-ultraviolet (DUV) lithography machines, a key technology for advanced chipmaking. Investor concerns were also heightened by the strong stock market debut of Chinese memory chipmaker ChangXin Memory Technologies, some analysts say.

Samsung AI demand drives record chip earnings amid foundry and mobile hurdles

Samsung's semiconductor business achieved record second-quarter performance driven by AI server memory demand. However, its foundry operations continue to trail Taiwan Semiconductor Manufacturing Co. while mobile unit faces rising component costs. The foundry division shows signs of improvement with increased demand for AI-related products and advanced process nodes. Samsung's mobile business experienced a profit loss due to surging mobile memory costs impacting margins. Samsung's AI boom lifts chips, tests foundry and mobile units, according to a news report by The Korea Herald. Samsung Electronics' semiconductor business delivered its strongest-ever second-quarter performance, fueled by booming demand for artificial intelligence server memory that pushed revenue and operating profit to record highs. However, the recovery remained uneven across the company's broader operations. While the memory business benefited from the AI surge, the foundry operations continued to lag behind Taiwan Semiconductor Manufacturing Co. (TSMC), and the mobile business faced pressure from rising component costs. As per the news report, despite the gap, Samsung's foundry business showed signs of improvement during the second quarter. This momentum was driven by stronger demand for AI-related products, including high-bandwidth memory base dies and semiconductors supplied to North American clients. Higher utilisation rates and growing demand for advanced process nodes also contributed to the gain, while major customer projects involving 2-nanometer high-performance computing process technology progressed. Although Samsung did not disclose standalone foundry revenue or operating profit figures, division officials indicated that profitability could return as demand for advanced semiconductor solutions expands. "While it is difficult to specify the exact timing of a turnaround due to the nature of the foundry business, we expect profitability to return in the near future," the news report quoted Samsung's foundry division during an earnings call. The overall progress represented a gradual recovery after a challenging period marked by low yields and weak utilisation rates in Samsung's 3-nanometer process last year. Nevertheless, closing the gap with market leader TSMC remained a steep task. TSMC controlled over 70 per cent of the global foundry market, while Samsung held a distant second place with a single-digit share. To differentiate itself from TSMC's primary focus on contract chip manufacturing, Samsung sought to leverage its broader semiconductor ecosystem spanning memory, foundry, and advanced packaging. Industry analysts noted that this integrated approach could become essential as AI chips require closer integration between logic processors, high-bandwidth memory, and packaging technologies. Highlighting this structural strategy, an industry expert pointed to the distinct position Samsung occupies in the evolving market. "Samsung's combination of memory, foundry and advanced packaging capabilities could provide a potential advantage as AI chip demand grows," the news report quoted an anonymous securities analyst. The analyst further noted the key operational benchmarks that the South Korean tech giant must hit before securing a full market turnaround. "However, improving 2-nanometer yields and securing major customers remain key challenges for a meaningful recovery in the foundry business," the analyst added. Samsung's mobile business is facing the other side of the semiconductor cycle: the same memory price surge that boosted its chip division has increased smartphone production costs. The Mobile eXperience and Networks division recorded 33.2 trillion won (USD 23.1 billion) in revenue in the second quarter, up 13.7 per cent from a year earlier, supported by solid sales of the Galaxy S26 and Galaxy A series. Operating profit, however, fell from a 3.1 trillion won profit a year earlier to a 700 billion won loss, as rising component costs weighed on margins. Araujo attributed the pressure on profitability to rising mobile memory costs driven by surging AI server demand, which has pushed up component prices. "The massive demand for AI servers is creating shortages and driving up prices for mobile memory. We already saw this in the second quarter as memory prices rose quarter-on-quarter, leading to pressure on our profitability, and we expect that cost burden to continue through the second half of the year," the news report quoted Daniel Araujo, vice president of the Mobile eXperience and Networks division. "We are tightening up how we allocate resources across areas like procurement, sales and research and development to minimise the impact on earnings," he added.

Samsung and SK Hynix answer AI doubters with big numbers and deals

In a remarkable week, the titans of the near-$1 trillion global memory industry smashed profit records. It took days before investors stopped selling -- a testament to the depth of anxiety in markets about an AI bubble. In the June quarter, Samsung Electronics and SK Hynix -- whose revenues make up 80% of the memory sector -- generated a staggering 150 trillion won ($104 billion) in combined operating profit in a single quarter, driven almost entirely by AI's demand for advanced memory and storage devices. For the full year, SK Hynix alone is projected to earn more in profits than it has made in the prior 27 years combined. Customers are vying to secure multiyear supply contracts, executives said. Margins surged past advanced chip manufacturing leader Taiwan Semiconductor Manufacturing Co.'s.

Samsung And SK Hynix Have Re-Engineered The DRAM Business Model To Defy Peak-Out And Recession

AI customers of various forms have given Samsung and SK hynix new opportunities to reach staggering heights through insatiable DRAM demand. However, these gateways can also become perilous pitfalls if companies aren't careful, which is why both memory manufacturers had to overhaul their entire business models to withstand those recession cycles. Here's how they did it. Securing LTAs (Long-Term Agreements) is one thing, but Samsung and SK hynix have insulated themselves from demand fallout The memory industry has historically been extremely vulnerable to those aggressive "boom-and-bust" cycles, and Samsung is no stranger to those back-breaking losses. Now, with the Korean giant and SK hynix having the upper hand thanks to the AI boom, they have successfully secured their long-term future through multi-year commitment contracts with a multitude of customers. Previously, Samsung's and SK hynix's memory sales strategy was dependent on a short-term, volatile purchasing model that exposed both manufacturers to price shifts. Rumors have also claimed that there were occasions when companies like Apple could outright refuse to accept additional DRAM shipments that Samsung had manufactured specifically for them, simply because demand had caught up to supply. Now, the tide has shifted in Samsung's and SK hynix's favor; by drafting various contractual safeguards, these DRAM firms have essentially insulated themselves from potential economic downturns and demand fallout. We've previously reported that Samsung has secured a minimum of 5-year agreements with AI customers to provide memory supply, with one of the conditions being that the manufacturer would receive timely advance payments. Assuming a recession does materialize, at least Samsung would be well compensated for its manufacturing efforts. These LTAs aren't limited to DRAM supply; they also cover HBM and enterprise SSDs. Fortunately, it's not as if the Korean technology behemoth has turned into a greedy corporation because its contracts mention that customers can renegotiate after every 12 months, and if they don't like the company's terms, there are always other memory makers looking to accommodate new clients. Then again, the only other alternatives remaining are SK hynix, Micron, and China's CXMT. According to a previous report, CXMT's DDR5 is pricier than Samsung's, which means that it's not an economically viable option, while the remaining options won't progress without LTAs in place, coupled with hefty deposits. In short, both Samsung and SK hynix have transformed a risky and short-term business model into a successful one that protects suppliers from external factors. Whether these conditions will remain in place after memory supply and demand stabilize, we don't know, but given that shortages will persist until 2028, Samsung and SK hynix have plenty of time to make adjustments. News Source: ZDNet Follow Wccftech on Google to get more of our news coverage in your feeds.

Samsung Stock Jumps Over 6% In Seoul as AI Memory Business Delivers Record Profit: 'Supply Constraints' E

Samsung Electronics Co. Ltd.'s (OTC:SSNLF) shares rose on Thursday after the chipmaker posted a record second-quarter operating profit as surging artificial intelligence memory demand boosted its semiconductor business, though higher component costs weighed on earnings in its mobile division. Operating Profit Beat Estimates Operating profit climbed to a record 89.5 trillion KRW ($61.93 billion) for the second-quarter, beating the 88.13 trillion KRW ($60.98 billion) analysts' forecast compiled by LSEG SmartEstimates. Revenue reached a record 171.5 trillion KRW ($118.70 billion) but fell short of the 172.65 trillion KRW ($119.49 billion) consensus. The results were driven by the device solutions division, where the memory business delivered another record quarter as strong AI server demand and higher memory prices offset ongoing supply constraints. AI Memory Demand Continues to Drive Growth Samsung said robust demand for server DRAM and HBM products, fueled by continued AI infrastructure spending, drove another record quarter for its memory business despite persistent supply constraints. "Despite efforts to increase production, supply constraints are expected to continue," the company said. Samsung holds about 39% of the global DRAM market, ahead of SK Hynix and Micron. Higher Component Costs Pressure Mobile Business Samsung's Mobile eXperience and Networks division reported an operating loss of 0.7 trillion KRW ($483 million), despite stronger year-over-year sales of the Galaxy S26 and Galaxy A series smartphones. The company said higher component costs across the industry weighed on earnings, offsetting stronger handset sales. Price Action: Seoul-listed shares of Samsung fell as much as 3.1% to a low of 202,000 KRW ($139.62), but gained 5.52% at the time of writing. The benchmark index KOSPI was up 4.44% after a 33% slump this month. Benzinga edge rankings indicate SKHY has a Value score in the 51st percentile and a Growth score in the 97th percentile. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Samsung To Be Guaranteed A Truckload Of DRAM Profit From AI Customers As Memory Maker Locks In 5-Year Deals To Create Healthy Demand & Price Structure

Five AI datacenter customers have reportedly established 5-year DRAM supply agreements with Samsung, guaranteeing timely shipments for the Korean giant's customers while also maintaining a legally-binding relationship that enables the manufacturer to comfortably rake in profits without worrying about excess production. DRAM and NAND volume covered in the 5-year agreements will reportedly account for 60-70 percent of Samsung's total production capacity A report from DigiTimes states that five additional AI customers are in their final talks with Samsung, with contracts being given flexibility to be extended by one year through annual negotiations. By receiving guaranteed payments, Samsung will have a robust structure of demand and price, allowing it to adjust its investments without worrying about losses stemming from unsold inventory. With amended agreements, around 60-70 percent of Samsung's total DRAM and NAND volume will be dedicated towards AI customers, but these contracts are shaped in a way that financially protects Samsung in the event that customers cannot honor these agreements. Substantial advance payments will enable Samsung's clientele to be a part of its illustrious list, and while the exact figure isn't mentioned, the company has apparently collected 25 percent of the expected funds. Mainstream products will be treated to minimum price floors to protect Samsung from the increased risk of market volatility. Given that AI datacenter customers have deep pockets to fork over incredibly large sums of money, Samsung appears to be well taken care of. Then again, given that the Korean titan previously suffered from mounting losses due to excessive supply that couldn't be sold amid declining demand, the company has learned from its mistakes to ensure that history doesn't repeat itself. With the new contracts, Samsung will be less exposed to the downturns of DRAM's supply and demand. While a memory shortage is expected to persist through 2028, the company doesn't want to take any chances, especially when billions are at stake. In fact, Samsung isn't the only memory player that wants firmer commitments from customers. SK hynix, another South Korean manufacturer, has also finalized long-term agreements with 10 customers, with Micron making strategic partnerships with automakers to obtain some client diversification. Samsung has already secured a record Q2 2026 revenue of $120 billion and profit of $62.65 billion. With these kinds of numbers, Samsung wants to pounce at every opportunity available and protect itself from every pitfall that shows up. At this pace, the company's profits will exceed cumulative earnings from the past four decades. News Source: DigiTimes Follow Wccftech on Google to get more of our news coverage in your feeds.

Samsung Q2 2026: Memory business drives record quarterly earnings despite first-ever loss in mobile division

Samsung has announced its financial results for the second quarter ending June 30, 2026, reporting an all-time quarterly high in revenue. The company posted a consolidated revenue of 171.5 trillion won (approximately USD 119.2 billion), representing a 129.89% year-over-year (YoY) and 79.49% quarter-over-quarter (QoQ) increase. Operating profit reached a record 57.2 trillion won (approximately USD 39.77 billion), surging 1804.25% YoY and 1117% QoQ. Mobile eXperience (MX) and Networks Performance The MX and Networks divisions reported a consolidated revenue of 33.2 trillion won for Q2 2026, marking a 13.69% YoY increase but a decrease of 12.86% QoQ. Operating profit for the division stood at -0.7 trillion won, a decrease of 122.5% YoY and a decrease of 125% QoQ. This is the company's first ever loss in the mobile division. While revenue grew year-on-year (YoY) on solid sales of the Galaxy S26 series and strong Galaxy A series momentum, earnings declined due to elevated component cost pressures across the industry, said Samsung. Looking Ahead: H2 2026 In H2 2026, the MX Business plans to strengthen AI leadership through personalized and intuitive experiences and drive overall market share growth based on flagship-first expansion centered on the new Galaxy Z8 and S26 series. The Business will also seek to enhance its premium mix across the Galaxy ecosystem and deliver AI-driven experiences in new form factors with the launch of its Intelligent Eyewear. Additionally, it will pursue efficiency initiatives to mitigate the impact of rising costs. Semiconductors (DS) Division Reaches New Heights The semiconductor unit was a primary driver of the quarter's record numbers, reporting an operating profit of 127.5 trillion won -- a 357% increase YoY and a 56% increase QoQ. The record-breaking quarter is achieved by proactively addressing AI demand despite limited capacity with a primary focus on server products. The continued industry-wide upward trend of prices also contributed to the record earnings. Additionally, the Business solidified market competitiveness via industry-leading products, with server revenue achieving a record-high share of the sales mix. The Business scaled up HBM4 sales with industry-leading performance and further strengthened technology competitiveness by shipping the industry's first HBM4E samples to major customers. Looking Ahead: H2 2026 In H2 2026, the Memory Business expects robust demand centered on servers stemming from continued AI infrastructure capex and broader adoption of agentic AI. Meanwhile, growth in demand for server DRAM, eSSDs, and HBM is expected to accelerate. This is projected to keep the market undersupplied, despite partial demand moderation in mobile and PCs. The Memory Business also plans to continue setting the pace for the market via technology leadership, seeking to optimize its portfolio in consideration of changes in demand by application and according to customer feedback. Despite efforts to increase production, supply constraints are expected to continue. The Business also plans to lead the market by addressing strong demand with a focus on high-value-added products, such as HBM4, DDR5, SOCAMM2 and others, while extending its leadership into next-generation AI platforms. This follows the industry's first HBM4E sample shipment, as well as the H1 2026 market penetration of PCIe Gen6 and UFS 5.0 solutions.

Samsung Posts Record Q2 Revenue as AI Memory Chip Demand Drives Profit Surge

Samsung Electronics Co. Ltd. recorded a sharp rise in Q2 earnings, fueled by strong demand for AI memory chips, even as its share price remains volatile amid investor concerns about future spending and competition. The South Korean technology group's revenue for the quarter that ended on June 30 was 171.5 trillion won, its highest quarterly revenue on record. Net profit rose to 71.27 trillion won, beating Bloomberg estimates of 68.36 trillion won. Additionally, operating profit increased more than 19-fold to around 89.5 trillion won, broadly in line with the company's previous forecast.

Samsung reports record profit as South Korean chip giants benefit from global AI boom

SEOUL, South Korea (AP) -- South Korean technology giant Samsung Electronics on Thursday reported a record operating profit of 89.5 trillion won (US$62 billion) for the April-June period, a day after crosstown rival SK Hynix also reported record earnings, 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 massively on increasing manufacturing capacity and the prospects of intensifying competition from China. Samsung's second-quarter operating profit was a more than 19-fold increase from a year earlier, and nearly all of it came from its semiconductor business, which 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 of 171.5 trillion won (US$119 billion) was also 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 continued expansion of AI infrastructure and broader adoption of agentic AI. Demand for server chips is expected to accelerate further, keeping the market undersupplied, it said in a statement. Samsung's report came a day after SK Hynix also reported a record second-quarter revenue of 60.5 trillion won (US$42 billion). However, SK Hynx's profit was still below the loftier market expectations and the company's shares declined by more than 9% on Wednesday. Samsung's share prices have also declined this week. Kim Jaejune, an executive of Samsung's memory chip division, said the company expects the gap between chip supply and demand to widen further in 2027. He said Samsung plans to begin construction of its second semiconductor fab in Taylor, Texas, before the end of this year, with the goal of starting production by 2030. Kim said Samsung has secured long-term chip supply contracts with what he called the "five major global data center clients" -- a possible reference to Amazon Web Services, Google, Meta, Oracle and Microsoft -- and is in talks with other major technology companies as demand for AI infrastructure surges. "Despite our efforts to increase production, demand growth is outpacing our efforts," he said in 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 centers as South Korea expands its AI ambitions, some analysts say there are growing concerns about whether such massive spending will ultimately generate sufficient returns. Shares of South Korean chipmakers have also been pressured by concerns over intensifying competition from China, with reports that a state-owned Chinese company had begun mass-producing domestically developed immersion deep-ultraviolet (DUV) lithography machines, a key technology for advanced chipmaking. Investor concerns were also heightened by the strong stock market debut of Chinese memory chipmaker ChangXin Memory Technologies, some analysts say. Samsung and SK Hynix last month announced plans to invest a combined 800 trillion won (US$554 billion) in a new chipmaking hub in the country's southwest to capitalize on surging AI-driven demand. The chiefs of Samsung, SK and South Korean automaker 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 U.S. technology companies, including AI firms OpenAI and Anthropic and chip designers Nvidia and Broadcom. The agreements span chip technologies, data centers and other AI infrastructure. In 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' stock prices, along with 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 Securities, said in a report this week. Kim Tong-hyung, The Associated Press

Samsung Q2 profit surges on AI-fueled memory demand By Investing.com

Investing.com-- Samsung Electronics Co Ltd (KS:005930) clocked a stronger-than-expected second quarter profit on Thursday, as the memory chip maker benefited from outsized artificial intelligence-fueled demand. Net profit for the three months to June 30 jumped to 71.27 trillion won ($49.2 billion), more than Bloomberg estimates of 68.36 trillion won. Operating profit jumped 19-fold year-on-year to 89.4 trillion won, in line with the company's forecast. Revenue jumped to a record high of 171.5 trillion won. Get more breaking news on the biggest AI stocks by subscribing to InvestingPro-- now at 60% off The world's largest memory chip maker by volume had flagged a sharp increase in its second-quarter earnings earlier in July, forecasting a third consecutive quarter of record profits amid rapidly growing demand for advanced memory from the AI industry. Strength in Samsung's memory chip business largely offset a weaker performance from its smartphone and electronics division, as a mix of rising component costs and sluggish consumer demand weighed. The company forecast "robust demand centered on servers stemming from continued AI infrastructure capex and broader adoption of agentic AI" in the second half of 2026. It expects the global memory market to remain "undersupplied" despite softening demand in consumer electronics and PCs. "Despite efforts to increase production, supply constraints are expected to continue," Samsung said. The South Korean conglomerate said it will continue to focus on producing higher-margin memory products, such as high bandwidth memory, for the AI industry. Additionally, the company said it plans to ramp up production at its foundry business, An AI-fuelled boom in memory demand provided Samsung with a major valuation spike in recent quarters, as rapidly tightening supplies drove up prices of its advanced memory offerings. But Samsung's stellar rally was seen rapidly unwinding in recent weeks, amid growing anxiety over bloated AI-driven valuations and whether the exponential AI-fueled growth over the past year could be maintained.

Samsung Sees Chip Crunch Through 2028 as Profit Soars to Record -- 2nd Update

Samsung Electronics said it expects the memory-chip shortage to persist through 2028, positioning the world's largest memory-chip maker to extend its streak of record earnings as the artificial-intelligence boom continues. The South Korean technology titan gave the upbeat outlook after reporting a 14-fold jump in net profit for the second quarter. The profit surge was largely driven by its core semiconductor division, which posted a staggering 200-fold-plus increase in operating profit, fueled by robust demand for advanced AI chips. Shares of the company shot up more than 8% on the bullish guidance and strong results before ending slightly lower, extending a selloff this week triggered by resurfacing concerns about the sustainability of the AI investment boom. The stock has tumbled more than 40% from its June peak amid a broader chip-sector rout, but it has still nearly tripled over the past year. Samsung's memory business chief, Jaejune Kim, highlighted the severity of chip supply shortages, saying customers are seeking multiyear contracts to secure memory supply, which continues to lag behind demand. "Demand left unmet this year because of supply shortages is being deferred to next year," Executive Vice President Kim said on the earnings call Thursday. "Supply shortages are expected to worsen further in 2027 and persist into 2028." He said Samsung is expected to lock in 60%-70% of its total chip-production capacity under five-year supply contracts, which can be renewed annually after their expiration, with volumes and other terms subject to renegotiation. Samsung has already finalized such multiyear contracts with five major global AI data-center customers, and it is in the final stages of negotiations with five others, Kim said. With strong semiconductor demand expected to persist through the second half of the year, Samsung projected that overall results would continue to improve. Net profit for the three months ended June reached a record 71.625 trillion won, equivalent to $49.64 billion, a nearly 1,300% increase from a year earlier. That figure surpassed the 70.170 trillion won consensus estimate compiled by FactSet. Revenue for the quarter more than doubled, hitting a record 171.500 trillion won, while operating profit soared 19-fold to a record 89.492 trillion won. Both metrics were largely in line with the company's preliminary estimates. Samsung's chip-making division was the core growth engine, delivering record operating profit of 89.2 trillion won. That accounted for most of the company's overall operating income for the quarter. Conversely, its smartphone and home-appliance businesses posted modest operating losses, as higher prices of chips and other components weighed on profitability. Samsung said Thursday that it plans to break ground on its second chip-fabrication plant in Taylor, Texas, by the end of 2026, targeting mass production in 2030. Construction of the first plant is proceeding as scheduled, with operations expected to begin this year. Eon Hwang and Y.J. Kim of Nomura said ahead of the earnings results that they expect Samsung to gain from rising prices of DRAM and NAND products--the two main types of memory chips. Strong demand and tight supply are likely to push prices 15%-20% higher sequentially in the July-September quarter, they said. Samsung on Saturday said it signed a memorandum of understanding with U.S. chip designer Broadcom to expand their partnership, part of which will see them collaborate on the supply of next-generation high-bandwidth-memory products for AI. The companies expect the collaboration to be worth more than $200 billion over five years through 2030.

Samsung Sees Chip Crunch Through 2028 as Profit Soars to Record -- Update

Samsung Electronics said it expects the memory-chip shortage to persist through 2028, positioning the world's largest memory-chip maker to extend its streak of record earnings as the artificial-intelligence boom continues. The South Korean technology titan gave the upbeat outlook after reporting a 14-fold jump in net profit for the second quarter. The profit surge was largely driven by its core semiconductor division, which posted a staggering 200-fold-plus increase in operating profit, fueled by robust demand for advanced AI chips. Shares of the company shot up more than 8% on the bullish guidance and strong results, putting them on track to snap a two-day selloff triggered by resurfacing concerns about the sustainability of the AI investment boom. The stock has tumbled about 40% from its June peak amid a broader chip-sector rout, but it has still nearly tripled over the past year. Samsung's memory business chief, Jaejune Kim, highlighted the severity of chip supply shortages, saying customers are seeking multiyear contracts to secure memory supply, which continues to lag behind demand. "Demand left unmet this year because of supply shortages is being deferred to next year," Executive Vice President Kim said on the earnings call Thursday. "Supply shortages are expected to worsen further in 2027 and persist into 2028." He said Samsung is expected to lock in 60%-70% of its total chip-production capacity under five-year supply contracts, which can be renewed annually after their expiration, with volumes and other terms subject to renegotiation. Samsung has already finalized such multiyear contracts with five major global AI data-center customers, and it is in the final stages of negotiations with five others, Kim said. With strong semiconductor demand expected to persist through the second half of the year, Samsung projected that overall results would continue to improve. Net profit for the three months ended June reached a record 71.625 trillion won, equivalent to $49.64 billion, a nearly 1,300% increase from a year earlier. That figure surpassed the 70.170 trillion won consensus estimate compiled by FactSet. Revenue for the quarter more than doubled, hitting a record 171.500 trillion won, while operating profit soared 19-fold to a record 89.492 trillion won. Both metrics were largely in line with the company's preliminary estimates. Samsung's chip-making division was the core growth engine, delivering record operating profit of 89.2 trillion won. That accounted for most of the company's overall operating income for the quarter. Conversely, its smartphone and home-appliance businesses posted modest operating losses, as higher prices of chips and other components weighed on profitability. Samsung said Thursday that it plans to break ground on its second chip-fabrication plant in Taylor, Texas, by the end of 2026, targeting mass production in 2030. Construction of the first plant is proceeding as scheduled, with operations expected to begin this year. Eon Hwang and Y.J. Kim of Nomura said ahead of the earnings results that they expect Samsung to gain from rising prices of DRAM and NAND products--the two main types of memory chips. Strong demand and tight supply are likely to push prices 15%-20% higher sequentially in the July-September quarter, they said. Samsung said Saturday that it signed a memorandum of understanding with U.S. chip designer Broadcom to expand their partnership, part of which will see them collaborate on the supply of next-generation high-bandwidth-memory products for AI. The companies expect the collaboration to be worth more than $200 billion over five years through 2030.

Samsung's Chip Earnings Push Net Profit to Record

Samsung Electronics' net profit surged 14-fold in the second quarter, as a stellar performance by its core semiconductor division, fueled by robust demand for advanced artificial-intelligence chips, helped the technology titan extend its streak of record earnings. The robust results from the world's top memory-chip maker come as investor concerns have resurfaced over the sustainability of the AI boom, despite tight supplies and elevated prices for memory products used to power AI infrastructure. On Thursday, the company reiterated an optimistic outlook for the memory-chip market over the coming quarters. With strong semiconductor demand expected to persist through the second half of the year, Samsung projected that overall results would continue to improve. Net profit for the three months ended June reached a record 71.625 trillion won, equivalent to $49.64 billion, a nearly 1,300% increase from a year earlier. That figure surpassed the 70.170 trillion won consensus estimate compiled by FactSet. Revenue for the quarter more than doubled, hitting a record 171.500 trillion won, while operating profit soared 19-fold to a record 89.492 trillion won. Both metrics were largely in line with the company's preliminary estimates. Samsung's chip-making division was the core growth engine, delivering a record operating profit of 89.2 trillion won. That accounted for most of the company's overall operating income for the quarter. Conversely, its smartphone and home-appliance businesses posted modest operating losses, as higher prices of chips and other components weighed on profitability. Shares of the company were up 1.2% in morning trading after the results. While the stock has tumbled more than 40% from its June peak amid a broader chip-sector selloff, it has still nearly tripled over the past year.

Samsung says memory chip shortage may continue even after 2027, here is what we know

Strong AI demand is helping Samsung's chip business grow despite challenges in other areas. Samsung Electronics has recently warned that the ongoing global memory chip shortage is likely to continue through 2027. They further added that the chipset shortage may stretch into 2028 as well because the demand for artificial intelligence keeps rising. According to the company, major tech firms are still investing heavily in AI infrastructure, which is creating strong demand for memory chips used in data centres and servers. According to reports, the South Korean tech giant has signed long-term supply agreements with leading global customers to secure future business. These agreements are expected to strengthen Samsung's market position while helping customers plan long-term production needs despite persistent supply constraints worldwide ahead. Samsung sees strong demand ahead Samsung expects demand for memory chips to remain high because companies continue to expand AI services. The company believes the market will stay short of supply as more businesses build data centres and increase the use of AI tools. Jaejune Kim, executive vice president of Samsung's memory business, told analysts during an earnings call that the supply shortage is expected to intensify in 2027 compared with this year and is likely to persist into 2028. Also read: Apple will rely entirely on Samsung for OLED MacBook screens, says report Long term supply deals offer stability Samsung revealed they had secured long-term supply agreements with the world's five largest data centre companies and are close to finalising similar deals with five other major firms. However, the names of the companies which secured the long-term deal still remain under wraps. According to reports, the contracts will run for at least five years and cover about 60 to 70 per cent of Samsung's future production capacity. The agreements also include advance payments and fixed minimum prices, helping the company plan investments with greater confidence. Also read: Microsoft earnings surprise: Azure outperforms, Copilot adoption hits new record Samsung's chip business delivers strong growth Samsung recently unveiled strong pre-order numbers for its latest smartphones, the Samsung Galaxy Z Fold 8, Galaxy Z Fold 8 Ultra, and Galaxy Z Flip 8. However, despite the strong demand, the bigger picture is less encouraging. The company reported a quarterly loss in its mobile business, as rising chip costs weighed on profitability. On the other hand, the DS division (memory division) at Samsung earned 89.2 trillion won in Q2 2026 operating profit compared to 53.7 trillion won in Q1 2026. This was an impressive rise by 66 per cent quarter-over-quarter, which was a record high. High memory chip costs and the need for AI have been crucial in bringing about this situation.