SEOUL, South Korea - South Korean tech leader Samsung Electronics announced on Thursday a record operating profit of 89.5 trillion won (62 billion dollars) for the April-June quarter, one day after rival SK Hynix posted its own record results, as the two dominant memory chip producers continue to benefit from the worldwide artificial intelligence surge.

Even with these strong profits, share prices for both firms dropped sharply this week on South Korea's fluctuating stock market, where individual investors often trigger big moves, amid worries about heavy spending on new production capacity and rising competition from Chinese players.

Samsung's second-quarter operating profit rose more than 19 times from the prior year, with nearly all gains coming from its semiconductor unit due to higher chip prices fueled by AI server demand and more shipments of advanced high-bandwidth memory chips for AI uses. This offset an operating loss in its mobile, TV and appliance segment, partly from elevated component expenses.

The company's quarterly revenue reached 171.5 trillion won (119 billion dollars), also a new peak. Samsung 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, the firm noted in a release.

Samsung's results followed SK Hynix's record second-quarter revenue of 60.5 trillion won (42 billion dollars) the day before. Yet SK Hynix's profit fell short of higher market forecasts, and its shares fell over 9 percent on Wednesday, while Samsung shares also declined this week.

Kim Jaejune, an executive in Samsung's memory chip division, stated the firm sees the chip supply-demand gap widening more in 2027. Samsung aims to start building its second semiconductor fab in Taylor, Texas, by year-end, targeting production start by 2030.

Kim noted Samsung has secured long-term supply deals with the five major global data center clients - possibly Amazon Web Services, Google, Meta, Oracle and Microsoft - and is negotiating with additional tech firms amid rising AI infrastructure needs.

Despite efforts to boost output, demand growth exceeds those steps, he said during a conference call.

Samsung and SK Hynix together make about two-thirds of global memory chips. While both pursue large investments in chip plants and data centers to support South Korea's AI goals, some analysts raise concerns over whether such spending will deliver enough returns.

Shares of Korean chipmakers face pressure from growing Chinese competition, including reports of a state-owned Chinese firm starting mass production of domestic immersion deep-ultraviolet lithography machines, a vital tool for advanced chips. Investor worries also rose after the strong debut of Chinese memory chipmaker ChangXin Memory Technologies, analysts say.

Samsung and SK Hynix announced last month plans to invest a combined 800 trillion won (554 billion dollars) in a new chip hub in the southwest to tap AI-driven demand.

The heads of Samsung, SK and Hyundai joined President Lee Jae Myung on his San Francisco visit last week, where they unveiled hundreds of billions in planned ties with U.S. tech firms including AI companies OpenAI and Anthropic plus chip designers Nvidia and Broadcom. The pacts cover chip tech, data centers and other AI infrastructure.

In a roundtable with foreign media last week, Kim Yong-beom, Lee's chief policy adviser, said the moves show how global tech firms are seeking long-term ties with Korean chipmakers for reliable AI memory supplies.

Yet the stock price swings for these firms and other global tech players indicate investors now focus more on long-term sustainability than short-term earnings, said Son In-joon, a semiconductor analyst at Eugene Securities, in a report this week.