Samsung Electronics earned more in three months than it had in the previous three years. The surge in memory chip prices, driven by AI infrastructure investment, has once again broken its earnings records.
In a regulatory filing on the 7th, Samsung Electronics announced preliminary second-quarter results of 171 trillion won in consolidated sales and 89.4 trillion won in operating profit for this year. Compared with the same period last year, sales rose 129.3 percent and operating profit jumped 1,810.3 percent. Compared with the previous quarter, sales increased 27.7 percent and operating profit rose 56.2 percent. For three straight quarters since the fourth quarter of last year, both sales and operating profit have set new all-time highs.
The first-half cumulative figures also show the scale of the surge. Preliminary sales for January through June this year came to 304.87 trillion won, while operating profit reached 146.63 trillion won. In just six months, the company brought in nearly as much as last year’s annual sales, and profit has already exceeded three times last year’s annual earnings.
◆ In three months, more than three years — the exceptional numbers
This performance is significant enough to require comparisons beyond the company itself. The 89.4 trillion won in operating profit is more than double last year’s full-year operating profit of 43.6011 trillion won. It is also higher than the 82.87 trillion won Samsung earned over the three years from 2023 through last year. It exceeded market expectations, which were 84.1606 trillion won according to Yonhap Infomax, by 6.2 percent.
It is extraordinary on the global stage as well. The record for quarterly operating profit had stood at Nvidia’s $53.5 billion, or about 81.8 trillion won, followed by Apple’s $50.9 billion, or about 78 trillion won. Samsung is now seen as having surpassed both companies in this quarter, setting a new record for quarterly operating profit among private companies worldwide.
There is also a hidden figure. The results include an estimated performance bonus provision of nearly 20 trillion won. Even after setting aside money that will go to employees, the company still posted 89 trillion won in profit. Excluding that expense, some analysts say actual operating profit likely exceeded 100 trillion won and may have approached 110 trillion won.
◆ AI has changed the memory-chip formula — the real engine behind the results
Detailed results by division were not disclosed. However, the Device Solutions (DS) division, which oversees semiconductors, is believed to have accounted for most of the profit. Analysts in the securities industry estimate DS operating profit at around 88 trillion won.
The engine is AI. As global big tech firms pour money into building AI data centers, orders for server memory have surged. The boom is not limited to high-bandwidth memory (HBM) used in AI accelerators; demand has also spread to general-purpose DRAM and NAND flash used for data storage, pushing prices higher. Samsung Electronics, with the world’s largest memory production capacity, is best positioned to benefit from the price increases. More recently, it became the first in the world to mass-produce and ship sixth-generation HBM, HBM4, further increasing the share of high-value-added products.
Some say the nature of the industry itself is changing. Memory has traditionally been a classic cyclical industry that swings between boom and bust depending on the economy. Today, however, the rise of long-term agreements (LTAs), under which big tech firms commit to volumes in advance, is creating a structure in which orders build up for years. The background to the jump from annual operating profit of just 6.57 trillion won in 2023 to quarterly profit of 89 trillion won three years later lies in this fundamental shift in the industry.
◆ Bright and dark sides under one roof, and the peak-out debate — remaining variables
Within the same company, the semiconductor boom has had mixed effects. The Device Experience (DX) division, which handles finished products, is likely to have underperformed. That is because rising prices for key components such as memory have increased cost burdens for smartphones and TVs.
The industry estimates operating profit for the mobile (MX) business at 500 billion to 1 trillion won, while TV and home appliances (VD and DA) are expected to post less than 100 billion won. Samsung Display is projected to have earned around 500 billion won, and automotive electronics subsidiary Harman around 200 billion to 300 billion won. In other words, some of the money earned by selling semiconductors is effectively flowing back out as burdens on affiliate businesses that buy semiconductors.
This is also linked to consumer prices. The increase in memory-chip prices is gradually being passed on to the prices of smartphones, laptops and home appliances. The semiconductor supercycle is a tailwind for exports and tax revenue, but it may also become a burden for prices felt by consumers.
There is also debate over how long the boom can last. Some in the industry have raised concerns that the cycle may have peaked and be heading toward a downturn. The counterargument is stronger. Since long-term supply contracts with big tech help support both volume and price, many expect the uptrend to continue at least through next year. Securities firms’ consensus forecast for Samsung Electronics’ full-year operating profit this year stands at 374 trillion won.
There is still a verification process ahead. Since this is a preliminary figure before final closing, some numbers may change in the confirmed results. The company’s explanation by division will be released at the end of this month along with the final earnings announcement and conference call. Whether 89 trillion won marks a peak or merely a waypoint will become clear then.