Samsung Electronics’ semiconductor division reported a more than 250-fold increase in profit to 89.2 trillion won ($62 billion) in the second quarter, fueled by soaring demand for AI memory chips, according to Bloomberg and CNBC. The results, which surpassed analyst expectations, underscore the company’s strong performance in the AI-driven memory market. However, the mobile division suffered its first quarter in the red with a loss of 700 billion won, as surging chip prices hurt Samsung’s mobile division.
Profit Surge Outpaces Expectations
Samsung’s semiconductor arm posted operating income of 89.2 trillion won ($62 billion) in the second quarter, up over 250-fold from a year earlier, according to CNBC and Reuters. The results beat analyst estimates of 79.3 trillion won, with group-wide net income coming to 71.3 trillion won. The company attributed the gains to robust demand for memory chips, which power AI infrastructure, and all-time high DRAM and NAND sales. In H2 2026, the Memory Business expects robust demand centered on servers stemming from continued AI infrastructure capex and broader adoption of agentic AI,
the company stated, per Reuters.
The profit surge was driven by Samsung scaling up HBM4 sales and shipping industry’s first HBM4E samples to major customers, including Nvidia’s Vera Rubin Platform, according to CNBC. The company also highlighted an expanded strategic collaboration with Broadcom across memory and foundry technologies. The forward guidance in terms of price — in terms of contractual obligations — are even more important,
said Jeremy Tan, chief executive officer of Tiger Fund Management in Singapore, as reported by Bloomberg.
Mobile Division’s Loss Contrasts with Semiconductor Success
While the semiconductor division thrived, Samsung’s mobile division reported a 700 billion won loss, its first quarter in the red, according to Reuters. The decline stemmed from higher component costs, as surging chip prices hurt Samsung’s mobile division. 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, as cited in Reuters.
The mobile division’s struggles contrast with the semiconductor unit’s record performance, which saw operating profit up over 250-fold from a year earlier.
Future Outlook: Supply Shortages to Persist Through 2028
Samsung said it expects chip shortages to worsen and extend into 2028, despite partial demand moderation in mobile and PCs, according to Reuters. Jaejune Kim, executive vice president of Samsung’s memory business, told analysts on a call that the company expects the market to remain undersupplied. The supply shortage in 2027 is expected to worsen compared to this year, and it is expected to continue in 2028,
he said, per Reuters.
The company’s long-term supply agreements with top five global data center firms, which account for 60% to 70% of its total capacity for the longer term, are designed to include upfront payments and floor pricing aimed at hedging the risks of its capital investments, according to Reuters. However, concerns about the sustainability of AI-driven demand and China’s growing chipmaking capabilities remain. 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,
noted Dow Jones & Company.
Samsung’s shares were trading up 1.6% early Thursday, but broader chip stocks faced volatility. Analysts like Ryu Young-ho, a senior analyst at NH Investment & Securities, called management’s commentary on the conference call better than expected, and it was one of the more reassuring calls we've heard in quite some time,
according to Reuters. Yet, the path forward remains uncertain, with the company navigating a delicate balance between capital spending and market demand.
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