South Korean tech leader Samsung Electronics posted a record operating profit of ₩89.5 trillion (€54 billion) for the April-to-June quarter on Thursday, marking a 56% rise from the previous three months and more than 19 times the figure from a year ago.

Using the company’s rounded numbers, the chip unit’s operating profit reached ₩89.2 trillion (€53.8 billion), which is 223 times higher than the ₩0.4 trillion (€241 million) recorded in the same period last year.

The semiconductor segment gained from higher chip prices fueled by AI server demand and greater shipments of advanced high-bandwidth memory products for AI uses. This offset an operating loss in the mobile, TV and appliance areas, driven partly by rising component expenses.

Quarterly revenue climbed 28% from the prior quarter and 130% from a year earlier to ₩171.5 trillion (€103.5 billion), setting a new peak. The firm expects memory product demand to stay robust in the second half, supported by ongoing AI infrastructure growth and wider use of agentic AI. Server chip demand should pick up further, leaving the market short on supply, according to a company statement.

Samsung released its figures one day after rival SK Hynix also reported record quarterly revenue and operating profit, as the two biggest memory chip producers continue to benefit from the worldwide AI surge.

Even with strong profits, shares of both firms dropped sharply this week on South Korea’s active stock market, where individual investors often trigger big price moves, amid worries about heavy spending on factory expansion and rising competition from China.

Chip Shortages May Grow Worse

Kim Jaejune, an executive vice-president in Samsung’s memory chip unit, noted that the supply-demand gap for chips is likely to widen more in 2027. He added that shortages are projected to continue into 2028.

The company said its first chip plant in Taylor, Texas, remains on schedule to start production this year. It also intends to begin work on a second facility that could reach mass output in 2030.

Kim stated that Samsung has locked in long-term supply deals with the five largest data center operators and is nearing agreements with five additional major firms. He did not name them, though reports suggest the group may include Amazon Web Services, Google, Meta, Oracle and Microsoft.

"Even as we work to boost output, demand growth is exceeding our pace," Kim said during an earnings call.

Samsung and SK Hynix together account for roughly two-thirds of global memory chip production. While both have launched large investments in chip plants and data centers to support South Korea’s AI goals, some analysts raise questions about whether the scale of spending will deliver adequate returns over time.

The heads of Samsung, SK and South Korean automaker Hyundai accompanied President Lee Jae Myung on his San Francisco visit last week, where they unveiled hundreds of billions of dollars in planned ties with leading US tech firms, including AI companies OpenAI and Anthropic plus chip designers Nvidia and Broadcom. The deals cover chip technologies, data centers and other AI infrastructure.

At a roundtable with foreign media last week, Kim Yong-beom, the president’s chief policy adviser, noted that the moves show how global tech firms are racing to secure long-term ties with South Korean chipmakers to ensure steady memory chip supplies for AI.

Still, swings in the firms’ share prices and those of other global tech companies indicate investors are looking past near-term results toward longer-term viability, according to a report this week by Son In-joon, a semiconductor analyst at South Korea’s Eugene Investment & Securities.