Volkswacht Bodensee - Samsung operating profit up 1,800% in second quarter on AI boom

Samsung and other leading memory chipmakers have seen profits skyrocket in 2026, but their share prices have proven volatile as investors question whether the AI-boom has gone too far.

The world's largest memory chipmaker posted April-June operating profit of 89.49 trillion won ($62 billion) -- up 1,813.8 percent on-year, the company said in a regulatory filing.

The firm posted revenue of 171.49 trillion won, up 130 percent from a year earlier.

Its net profit soared 1,299.9 percent on-year to 71.62 trillion won, it said.

These earnings met market expectations, South Korea's Yonhap news agency said, citing its own financial data firm.

The boom results were posted despite South Korean stocks suffering a sharp sell-off on Wednesday as nervous traders unwound AI-driven bets, fretting whether lofty profit forecasts are realistic.

Samsung fell more than 12 percent, while its main domestic rival SK hynix tumbled nearly 20 percent after 14 percent losses the day before -- halving its value from record highs last month.

SK hynix's second quarter operating profit and revenue posted Wednesday came in below expectations, even as net profit soared a forecast-beating 1,242 percent.

Samsung Electronics, SK hynix and US firm Micron are the world's three leading manufacturers of high-bandwidth memory (HBM) chips used in AI processors to generate chatbot responses and realistic images.

Samsung said in a statement that its memory business "achieved another record-breaking quarter" by proactively addressing AI demand with a primary focus on server products.

"The continued industry-wide upward trend of prices also contributed to the record earnings," the company said.

Looking ahead to the second half, the firm said it expects robust server demand, driven by continued AI infrastructure spending and the wider adoption of agentic AI -- a system that autonomously performs tasks across workflows to boost productivity.

Analysts say the firms' boom is likely to continue as North American tech giants ramp up investment in AI data centres requiring their cutting-edge chips.

AI expansion has also pushed up prices and shipments of conventional NAND and DRAM memory chips to Samsung's advantage, analysts say.

The company's HBM business is also "driving a significantly positive impact on their foundry business as well", MS Hwang, an analyst at investment firm Counterpoint, told AFP.

"In short, Samsung is leveraging its strong position in memory to aggressively capture share across most of its business units."

- 'The biggest risk' -

Over the weekend, Samsung announced it would pursue a "strategic collaboration" for the "supply of industry-leading memory solutions, including HBM" -- supporting US chipmaker Broadcom's next-generation AI accelerators.

The partnership is estimated to exceed $200 billion over the next five years through 2030.

Analysts say the move could be seen as Samsung's effort to find an AI memory customer base beyond Nvidia, which has long relied on SK hynix for HBM.

"Samsung's ability to supply HBM to Nvidia is, in my view, somewhat constrained," Joo Won, head of the economic research division at Hyundai Research Institute, told AFP.

"Since it hasn't been able to make meaningful inroads into SK hynix's market share, it appears to be shifting its focus to other areas."

The semiconductor boom has boosted South Korea's tax revenue, prompting President Lee Jae Myung to describe it as a "golden window" to invest in AI and semiconductor industries.

Seoul has confirmed plans for Samsung and SK hynix to invest a combined 800 trillion won in building four advanced semiconductor fabrication plants at a former military airport site in Gwangju.

The Gwangju fab is a "long-term project that will take considerable time to materialise," said analyst Joo.

"The biggest risk is that the semiconductor supercycle could be over by the time it's ready, leaving the industry facing weaker earnings."

R.Braegger--VB