Samsung Posts 19-Fold Jump in Q2 Operating Profit Amid Strong AI Demand

South Korean technology giant Samsung Electronics reported a sharp surge in second-quarter earnings on Thursday, driven by robust demand for memory chips used in artificial intelligence (AI) data centres. The company posted a 19-fold increase in operating profit compared to the same period last year, highlighting the continued momentum in the AI semiconductor market.

Samsung's operating profit for the April–June quarter reached 89.5 trillion won (US$62 billion), representing an increase of more than 1,800% year-on-year. Revenue climbed 130% to 171.5 trillion won, while net profit soared nearly 1,300% to 71.6 trillion won, in line with market expectations.

The strong performance comes despite recent volatility in semiconductor stocks, as investors debate whether the rapid growth driven by AI demand can be sustained. On Wednesday, Samsung shares fell more than 12%, while rival SK hynix dropped nearly 20% after posting earnings that fell short of expectations, although both companies recorded significantly higher profits than a year ago.

Samsung, alongside SK hynix and US-based Micron, remains one of the world's leading producers of high-bandwidth memory (HBM) chips, a critical component powering AI processors used for applications such as chatbots and AI-generated content. The company said its memory business delivered another record-breaking quarter, supported by strong demand for server products.

Looking ahead, Samsung expects server demand to remain robust in the second half of 2026, fuelled by continued investment in AI infrastructure and the broader adoption of agentic AI technologies. Chief Financial Officer Park Soon-cheol also projected that the global memory chip shortage could intensify in 2027 and remain tight through 2028.

Samsung confirmed that its first semiconductor manufacturing facility in Taylor, Texas, remains on schedule to begin operations later this year. Construction of a second plant is expected to commence later in 2026, with mass production targeted for 2030.

Industry analysts noted that the AI boom has also strengthened demand for conventional NAND and DRAM memory chips, further benefiting Samsung's semiconductor business. Recently, the company announced a strategic partnership with US chipmaker Broadcom to supply advanced memory solutions, including HBM, for next-generation AI accelerators. The agreement is estimated to be worth more than US$200 billion through 2030.

Despite speculation about a potential US stock market listing following SK hynix's recent fundraising, Samsung dismissed the possibility, stating that its strong cash generation leaves it with no immediate need to raise additional capital.

The semiconductor industry's rapid growth has also boosted South Korea's economy, prompting the government to support major investments in chip manufacturing. Samsung and SK hynix plan to invest a combined 800 trillion won in developing four advanced semiconductor fabrication plants in Gwangju, although analysts caution that the long-term project may not be completed until after the current semiconductor supercycle has peaked.