Samsung reports record quarterly profit as AI-driven memory chip demand surges

Samsung Electronics has warned that the global semiconductor shortage could worsen in the coming years and continue until 2028, as artificial intelligence-driven demand keeps pressure on chip supplies.The warning came after Samsung reported a more than 250-fold increase in semiconductor profits, easing investor concerns that heavy AI infrastructure spending by major technology companies could slow down and affect growth.Shares of the world’s largest memory chipmaker initially surged as much as 8% following the announcement before closing 1.1% lower. Samsung Opens India Pre-Orders For Galaxy Z Fold8, Fold8 Ultra & Flip8 With Galaxy AI, Prices Start At ₹1.24 LakhJaejune Kim, executive vice president of Samsung’s memory business, told analysts that chip supply constraints are expected to become more severe in 2027 compared with current levels and may continue into 2028.Kim said Samsung has entered long-term supply agreements with five major global data centre companies and is close to finalising deals with five more large customers. While the companies were not named, he said these agreements would run for at least five years and cover 60% to 70% of Samsung’s long-term production capacity.The contracts include advance payments and minimum pricing arrangements designed to reduce risks associated with large-scale capital investments.Analysts viewed Samsung’s outlook positively, with Ryu Young-ho of NH Investment & Securities saying the company’s comments were more reassuring than expected.Samsung’s optimistic forecast comes after a recent decline in semiconductor stocks caused by concerns over AI infrastructure funding and increasing competition from China.Samsung's First AI-Powered Smart Glasses With 9-Hour Battery Life Launched Alongside New Foldable Range: Here's What's New Samsung’s semiconductor division recorded an operating profit of 89.2 trillion won ($61.7 billion) in the second quarter, representing a rise of more than 250 times compared with the previous year.However, higher chip prices affected its mobile business, which reported a 700 billion won loss, marking its first quarterly loss.Analysts said Samsung’s semiconductor success has increased its dependence on memory pricing and continued demand from large technology companies.The company also highlighted strong growth prospects in high bandwidth memory (HBM) chips used in AI processors. Samsung expects HBM4 revenue to more than triple in the third quarter and aims to increase its HBM market share to match its broader DRAM business share.Samsung said its foundry operations are expected to recover soon due to improved factory utilisation and higher chip prices. The company remains on track to begin operations at its Texas fabrication plant this year and plans another facility by 2030.The company reported quarterly revenue of 171.5 trillion won, up 130% year-on-year, while operating profit reached 89.5 trillion won.

The South Korean tech giant's memory chip division hit all-time highs on AI server demand, while elevated component costs pushed its mobile unit into the red

Samsung’s chip operations reported an operating income of 89.2trn won in the June quarter.

South Korean technology giant Samsung Electronics on Thursday reported a record operating profit of 89.5 trillion won ($62 billion) for the April-June period, a day after crosstown rival…

Operating profit at Samsung’s semiconductor division rose to more than 220 times its year-earlier level. However, the company warned that memory chip shortages could worsen next year as AI infrastructure expands rapidly.

Samsung Electronics has reported a record operating profit of $62 billion for the April-June quarter