Samsung Reports Record Profit Fueled by AI Chip Demand

Samsung Electronics, the South Korean technology giant, announced a record operating profit of 89.5 trillion won ($62 billion) for the April-June quarter. This achievement is largely attributed to the surging global demand for artificial intelligence, which has significantly boosted its semiconductor business.

This record profit follows similar news from rival SK Hynix, another major South Korean memory chipmaker that also reported record earnings. The world's two largest memory chip producers are capitalizing on the worldwide artificial intelligence boom, particularly the demand for advanced high-bandwidth memory chips essential for AI applications.

Samsung's second-quarter operating profit represents a more than 19-fold increase compared to the same period a year ago. The semiconductor division's performance, driven by rising chip prices and increased shipments of AI-specific components, more than offset an operating loss in its mobile, TV, and home appliances division. The company's quarterly revenue also reached an all-time high of 171.5 trillion won ($119 billion).

Samsung anticipates sustained demand for its memory products in the second half of the year, citing the ongoing expansion of AI infrastructure and the broader adoption of agentic AI. The company expects further acceleration in demand for server chips, potentially keeping the market undersupplied.

Despite the record profits, shares of both Samsung and SK Hynix have experienced sharp declines in South Korea's stock market. Concerns among investors center on the companies' substantial planned investments in manufacturing capacity and the potential for intensified competition, including from China. Reports of Chinese companies developing advanced chipmaking technology and the strong market debut of a Chinese memory chipmaker have also heightened these concerns.

Samsung and SK Hynix have collectively announced plans to invest approximately 800 trillion won ($554 billion) in a new chipmaking hub in southwestern South Korea to meet the escalating AI-driven demand. These initiatives align with South Korea's broader ambitions in the AI sector.

Recently, executives from Samsung, SK, and Hyundai joined South Korean President Lee Jae Myung in San Francisco. During this trip, they announced significant cooperation plans with major U.S. technology firms, including OpenAI, Anthropic, Nvidia, and Broadcom, covering chip technologies, data centers, and other AI infrastructure. These partnerships underscore the global race among technology companies to secure reliable long-term supplies of memory chips crucial for AI development.