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Samsung Electronics has projected its operating profit surged 19-fold to a record in the second quarter as acute supply shortages continued to drive up memory chip prices amid booming demand fuelled by the AI race.
The world’s largest memory-chip maker by sales forecast operating profit of Won89.4tn ($58.4bn) for the April-to-June quarter on Tuesday. The figure exceeded Samsung Electronics’ profit for all of 2025 and beat analysts’ expectations of Won87.3tn, according to LSEG SmartEstimate. Sales were estimated to more than double from a year earlier to Won171tn.
The guidance marked a third consecutive quarter of record operating profit for the South Korean company as memory-chip makers try to keep pace with demand from AI data centres. Analysts expect supply shortages to persist into next year.
Memory-chip makers have been among the biggest beneficiaries of the AI infrastructure build-out. Samsung Electronics’ shares have more than doubled this year, lifting its market capitalisation above $1tn, although the stock has retreated recently amid concerns over returns on massive AI investment. Shares fell 7 per cent on Tuesday.
Samsung, alongside SK Hynix, is a leading supplier of high-bandwidth memory chips used in AI data centres. Analysts expect broader adoption of AI agents, which can perform tasks autonomously, to sustain strong memory demand.
The manufacturers’ focus on higher-margin HBM products has constrained supply of conventional memory chips used in consumer electronics.
“DRam and Nand prices continue to exceed prior assumptions, reflecting ongoing tight supply conditions,” said Jing Jie Yu, an analyst at Morningstar, in a recent report. “Hyperscaler-led AI investments remain robust, and resulting memory demand is driving unusually strong bargaining power for memory makers.”
Average selling prices for DRam chips, which store data temporarily, and Nand chips, which can store data without a power source, rose 44 per cent and 53 per cent, respectively, in the second quarter from the previous three months, according to Citi.
Nomura expects commodity DRam and Nand prices to rise by a further 25 per cent and 24 per cent this quarter, supported by stronger demand from consumer electronics and data centres.
Despite surging margins, analysts said Samsung’s earnings would be affected by employee bonuses. The company reached an agreement with its labour union in late May to pay out 10.5 per cent of the chip division’s operating profit as a special bonus. Samsung will release detailed results, including net profit, later this month.
While analysts remain optimistic about the industry’s short-term outlook, some investors have become more cautious about the sustainability of AI spending by large technology companies.
JPMorgan said investors were increasingly questioning whether AI memory’s share of cloud service providers’ capital expenditure — estimated at 52 per cent this year and more than 70 per cent next year — could be maintained.
Samsung and SK Hynix have said they plan to invest a combined $2tn to expand chip production in South Korea. Samsung’s investment will run from 2026 to 2040, while SK Hynix has not disclosed a timeline.
Chip stocks have come under pressure in recent days as the industry’s aggressive expansion plans fuel concerns over future oversupply, alongside reports that Meta plans to sell excess computing capacity to external customers as part of a push into cloud services.
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