Seoul: Samsung Electronics Co. announced a remarkable surge in its second-quarter net profit, which increased by nearly 1,300 percent from the previous year. This growth was largely driven by the high demand for semiconductors related to artificial intelligence (AI), which compensated for weaker earnings in Samsung's mobile business sector.
According to Philippines News Agency, Samsung's net profit for the April-June period reached 71.62 trillion won (approximately USD49.6 billion), a significant increase from the 5.11 trillion won recorded a year earlier. The company's operating income for the same quarter rose by 1,813.8 percent to 89.49 trillion won, with sales up by 130 percent, totaling 171.49 trillion won. This marks the third consecutive quarter in which Samsung, the world's leading memory chip manufacturer, has posted record-breaking revenue and operating profit.
The financial results aligned with market expectations, as analysts had predicted a net profit of 71.21 trillion won, based on a survey by Yonhap Infomax, the financial data unit of Yonhap News Agency. Earnings per share were reported at 10,849 won for both common and preferred shares, marking a 52 percent increase from the previous quarter, placing Samsung among the top global technology companies.
Samsung attributed its impressive performance to its strategic response to increasing market demand, leveraging its leading position in AI-related products. The semiconductor division reported record sales of 127.5 trillion won and an operating profit of 89.2 trillion won for the quarter. The strong performance was fueled by ongoing global investments in AI infrastructure, which have tightened semiconductor supplies and maintained elevated memory chip prices.
Looking ahead, Samsung expects sustained strong demand for semiconductors in the second half of the year, which should support continued growth in overall earnings. The company highlighted robust demand for memory products, particularly for servers driven by ongoing AI infrastructure investments and broader adoption of AI technologies.
Industry experts anticipate favorable market conditions for the global chip market to persist at least through the next year. Samsung mentioned during a conference call that the supply-demand gap is expected to widen further next year compared to this year. To address this, the company plans to optimize its product mix for both DRAM and NAND flash memory, aligning with changing market demands and customer needs.
Samsung also expects improved profitability in its foundry business later this year as it restructures its portfolio to prioritize high-growth segments. The company reported capital expenditures totaling 16.8 trillion won in the second quarter, with 15.4 trillion won invested in the chip division and 700 billion won allocated to the display business.
As the world's largest memory chip producer, Samsung has significantly benefited from the AI boom. Despite concerns raised by some analysts about the potential peak in the semiconductor industry's rapid growth, Samsung continues to secure long-term supply agreements with major technology companies and expand production capacity to meet anticipated medium to long-term demand.
In the mobile, TV, and home appliance division, however, Samsung reported sales of 48 trillion won and an operating loss of 800 billion won, marking its first quarterly operating loss since its inception. The mobile business, primarily driven by sales of the Galaxy S26 series and the A series, experienced an increase in sales from the previous year but saw a decline in operating profit due to rising cost pressures, particularly in key components like DRAM and NAND flash memory.
Additionally, Samsung's home appliance and TV businesses reported an operating loss, affected by weak global demand and increased raw material costs due to conflicts in the Middle East. Samsung anticipates challenging business conditions to continue amid global uncertainties and rising production costs. The company aims to enhance competitiveness and pursue structural improvements in its business operations.
