Samsung's Quarterly Profit Surges on AI Chip Demand Despite Share Price Decline

The A.I. boom has propelled the South Korean tech giant’s earnings, but its shares sank as investors had even loftier expectations.

· Record Earnings: Samsung Electronics reported an operating profit of 89.4 trillion won (about US$58 billion) for April–June 2026, nearly 20 times higher than the same quarter last year.

· Higher Than Two Years Combined: The company's quarterly operating profit exceeded its total earnings for 2024 and 2025 combined.

· Revenue Growth: Quarterly revenue more than doubled to approximately US$112 billion.

· AI Boom Drives Growth: Strong global demand for high-bandwidth memory (HBM) and other memory chips used in AI data centres significantly boosted Samsung's earnings.

· Share Price Falls: Despite record profits, Samsung's shares fell 7% after the announcement as investors had expected even stronger results.

· Strong Stock Performance: Samsung's stock has more than doubled in 2026, driven by optimism surrounding the AI industry.

· South Korean Market: The KOSPI recently reached record highs but fell 5% after Samsung's results, with Samsung contributing significantly to the decline.

· Market Concentration: Analysts estimate that around 90% of the KOSPI's gains over the past year have been driven by Samsung and SK Hynix.

· Trillion-Dollar Valuations: Both Samsung and SK Hynix have achieved market valuations exceeding US$1 trillion.

· Tight Chip Supply: Limited global supply of HBM chips has enabled memory manufacturers to raise prices and maintain high profit margins.

· Supply Outlook: Analysts expect the supply of HBM chips to remain tight until around 2028, when new semiconductor manufacturing plants become operational.

· South Korea's Role: South Korea produces about 60% of the world's memory chips, reinforcing its leadership in the global semiconductor industry.

· Employee Incentives: Samsung earlier agreed to offer annual bonuses of up to US$400,000 to semiconductor division employees if profit targets are achieved.

[ABS News Service/07.07.2026]

Samsung Electronics said that its latest quarterly operating profit was nearly 20 times higher than last year’s, spurred by a seemingly insatiable demand for memory chips used in data centers for artificial intelligence.

The preliminary results for April through June, announced by the South Korean tech giant on Tuesday, underscore how the staggering investments that companies are making to build computing infrastructure for A.I. continue to propel earnings for memory chip makers to record levels.

Samsung said it generated an operating profit of 89.4 trillion South Korean won, or roughly $58 billion, in the second quarter. That was well above the 4.7 trillion won it earned in the same quarter last year, and more than it earned in 2024 and 2025 combined. The company’s revenue also more than doubled in the quarter, to about $112 billion.

Despite the robust results, Samsung’s shares fell 7 percent in Seoul after the announcement, a sign of how lofty investors’ expectations have become. Still, Samsung’s stock has more than doubled this year, driven by A.I. mania.

The Kospi, South Korea’s benchmark stock index, set a series of records recently, outpacing major markets around the world. It has more than doubled over the past year, and analysts at Goldman Sachs estimate that nearly 90 percent of those gains have been generated by Samsung and SK Hynix, another memory chip maker. Both Samsung and SK Hynix reached trillion-dollar market valuations this year. “The equity market has never been more concentrated,” the analysts wrote.

The mania has drawn in lots of individual investors, generating increasingly gut-wrenching volatility in recent months. Although the Goldman strategists warned of a “bumpy path given inherent memory-sector volatility,” they forecast a 20 percent gain for the Kospi in the second half of the year, buoyed by “exceptionally strong” earnings growth.

The Kospi fell 5 percent on Tuesday, dragged down by Samsung.

High-bandwidth memory chips are a critical component in feeding data necessary for training A.I. systems and running large-language models, but the surge in data center spending has exhausted much of the world’s supply for these semiconductors. This has allowed Samsung, SK Hynix and other memory makers to raise prices and maintain wide profit margins.

On Monday, SK Hynix began a U.S. share sale worth a potential $28 billion, which would make it the second-largest new share issue on record, after SpaceX’s blockbuster $86 billion public offering last month.

Sanjeev Rana, head of Korea research at CLSA, an Asia-based investment group, said he expects the supply of high-bandwidth memory chips to remain tight through 2028, when new semiconductor factories currently under construction come online and increase production.

High-performance memory chips are essential for reducing the energy costs of running data centers and improving their capabilities.

South Korea produces around 60 percent of the world’s memory chips. Yet many worry that the gains will flow primarily to a handful of companies, such as Samsung, with little spillover to the broader economy.

Earlier this year, Samsung headed off a strike by agreeing to pay employees in its semiconductor division, including assembly-line operators, an annual bonus of up to $400,000 next year if certain profit targets are met.