Samsung Q2 profit jumps 19-fold as AI chip demand offsets mobile loss

Samsung Electronics achieved its highest-ever quarterly operating profit, fueled by strong AI chip demand. Rival SK Hynix also reported record revenue, reflecting industry strength. However, investor sentiment declined due to expansion plans and Chinese competition.

Both companies are investing heavily in new chipmaking facilities and data centers. Global partnerships are strengthening to secure memory chip supplies for AI. SEOUL, July 30 (Yonhap) -- Samsung Electronics Co.

SEOUL, South Korea (AP) — 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 SK Hynix also reported record earnings, as the world’s two largest memory chipmakers continue to ride the global artificial intelligence boom.Despite their soaring profits, the companies’ shares have fallen sharply this week in South Korea’s volatile stock market, where retail investors often drive sharp swings in share prices, as concerns grow over their plans to spend massively on increasing manufacturing capacity and the prospects of intensifying competition from China.Samsung’s second-quarter operating profit was a more than 19-fold increase from a year earlier, and nearly all of it came from its semiconductor business, which benefited from rising chip prices driven by demand for AI servers and increased shipments of advanced high-bandwidth memory chips used to power AI applications. That outweighed an operating loss in its mobile, TV and home appliances division, partly due to higher component costs.Samsung’s quarterly revenue of 171.5 trillion won ($119 billion) was also an all-time high. The company said it expects demand for its memory products to remain strong in the second half of the year, driven by continued expansion of AI infrastructure and broader adoption of agentic AI.

Demand for server chips is expected to accelerate further, keeping the market undersupplied, it said in a statement.Samsung’s report came a day after SK Hynix also reported a record second-quarter revenue of 60.5 trillion won ($42 billion). However, SK Hynx’s profit was still below the loftier market expectations and the company’s shares declined by more than 9% on Monday. Samsung’s share prices have also declined this week.While Samsung and SK Hynix have embarked on major investments in semiconductor manufacturing facilities and data centers as South Korea expands its AI ambitions, some analysts say there are growing concerns about whether such massive spending will ultimately generate sufficient returns.Shares of South Korean chipmakers have also been pressured by concerns over intensifying competition from China, with reports that a state-owned Chinese company had begun mass-producing domestically developed immersion deep-ultraviolet (DUV) lithography machines, a …

Despite their soaring profits, the companies’ shares have fallen sharply this week in South Korea’s volatile stock market, where retail investors often drive sharp swings in share prices, as concerns grow over their plans to spend massively on increasing manufacturing capacity and the prospects of intensifying competition from China. Samsung’s second-quarter operating profit was a more than 19-fold increase from a year earlier, and nearly all of it came from its semiconductor business, which benefited from rising chip prices driven by demand for AI servers and increased shipments of advanced high-bandwidth memory chips used to power AI applications. Samsung’s quarterly revenue of 171.5 trillion won ($119 billion) was also an all-time high.

Samsung’s report came a day after SK Hynix also reported a record second-quarter revenue of 60.5 trillion won ($42 billion). Samsung’s share prices have also declined this week. While Samsung and SK Hynix have embarked on major investments in semiconductor manufacturing facilities and data centers as South Korea expands its AI ambitions, some analysts say there are growing concerns about whether such massive spending will ultimately generate sufficient returns.