Samsung's chip division posts record $62 billion quarterly profit on AI memory boom

Samsung Electronics reported all-time record quarterly operating profit of KRW 89.5 trillion — roughly $62 billion — for the second quarter ended June 30, 2026. The figure represents a 1,814% increase year-over-year and was driven almost entirely by the company's semiconductor division capitalizing on surging AI infrastructure demand. Total consolidated revenue hit KRW 171.5 trillion, another quarterly record, up 130% compared to Q2 2025.

A semiconductor machine running at full speed

Samsung's Device Solutions (DS) Division — which covers memory, NAND, and system chips — posted KRW 127.5 trillion in revenue and KRW 89.2 trillion in operating profit for the quarter. The division's operating margin of roughly 70% is a number usually associated with software businesses, not chip manufacturers.

The Memory Business within DS achieved record revenue and profit for the third consecutive quarter, with server products driving an all-time-high share of the sales mix. Price increases across the memory industry contributed, but Samsung's performance also reflects deliberate portfolio decisions: prioritizing high-margin AI server products over consumer DRAM during a period of constrained manufacturing capacity.

HBM4 and the race for AI memory leadership

Samsung scaled up shipments of HBM4 — the fourth generation of High Bandwidth Memory that AI accelerators like Nvidia's Blackwell chips require — and, critically, shipped the industry's first HBM4E samples to major customers. HBM4E is the next step beyond HBM4, offering higher bandwidth density for the most demanding AI training workloads. Shipping samples to customers this quarter means Samsung is positioning for HBM4E volume production in 2027, ahead of rival SK Hynix.

For H2 2026, Samsung's Memory Business expects continued undersupply of server DRAM, eSSDs, and HBM as AI infrastructure capex remains elevated and agentic AI deployments expand. That supply squeeze, combined with Samsung's technology lead on HBM4E, sets up the second half as another strong period for the division.

The contrast: consumer electronics struggled

Samsung's Device eXperience (DX) Division — smartphones, TVs, and home appliances — posted a small operating loss of KRW 0.8 trillion for the quarter, as rising component costs squeezed margins and consumer demand in key markets remained soft. The Galaxy Z Fold8 and S26 flagship lines are expected to drive DX improvement in the second half, but the contrast with the semiconductor division's performance is stark: Samsung is now essentially two businesses operating in opposite directions.

Earnings per share of KRW 10,849 were up 52% quarter-on-quarter, and R&D spending hit a quarterly record of KRW 16 trillion — a sign that Samsung is reinvesting aggressively to maintain its semiconductor technology lead even as profits surge. Full results are available via Samsung's official investor relations page.

Reading the broader picture

Earlier this week, Samsung's stock sold off alongside SK Hynix on investor fears about AI spending slowdowns. Wednesday's results are the empirical answer to that concern: actual demand from AI infrastructure customers remains strong enough to push Samsung's chip division to margins that most software companies would envy. Whether that demand holds through H2 as hyperscaler capital expenditure cycles mature is the real question for 2027 — but for now, the boom is still very much happening.