Samsung Q2 results: Tech giant posts record high $62 billion profit on AI chip boom

Samsung Q2 results: South Korean technology giant Samsung Electronics has posted its highest-ever quarterly operating profit as the artificial intelligence boom continues to fuel demand for memory chips, especially those used in AI servers.Samsung reported an operating profit of 89.5 trillion won ($62 billion) for the April-June period, marking a more than 19-fold jump from the same period a year earlier. The results came a day after rival SK Hynix also announced record earnings, reflecting the chip industry’s strong performance.However, the record numbers could not translate into gains for investors as shares of both companies have declined sharply this week amid concerns over large-scale investments to expand production capacity and growing competition from China.

Semiconductor business drives quarter

Samsung’s semiconductor division was the main contributor to its second-quarter performance, supported by rising chip prices, increased demand for AI servers and higher shipments of advanced high-bandwidth memory chips used in AI applications.The strong performance of the chip business helped counter an operating loss reported by Samsung’s mobile, television and home appliances division, which was partly impacted by higher component costs.Along with record operating profit, Samsung also reported its highest-ever quarterly revenue at 171.5 trillion won ($119 billion).The company expects demand for its memory products to remain strong in the second half of the year, supported by continued expansion of AI infrastructure and wider adoption of agentic AI.“Demand for server chips is expected to accelerate further, keeping the market undersupplied,” Samsung said in a statement.

SK Hynix also posts record revenue, but misses expectations

Samsung’s results followed SK Hynix’s announcement of record second-quarter revenue of 60.5 trillion won ($42 billion). However, even after clocking record-high profits, the figures still fell short of market expectations. The company’s shares fell by more than 9% on Wednesday, while Samsung’s stock also declined during the week.Samsung and SK Hynix together account for about two-thirds of the world’s memory chip production.The two companies have been making major investments in semiconductor manufacturing facilities and data centres as South Korea pushes ahead with its AI expansion plans.

Heavy investments raise concerns

While AI demand has boosted the memory chip market, some analysts have expressed concerns about whether the companies’ massive spending plans will deliver sufficient returns.Samsung and SK Hynix announced last month that they would invest a combined 800 trillion won ($554 billion) in a new chipmaking hub in South Korea’s southwest region to capitalise on rising AI-driven demand.Investors have also been closely watching competition from China, which has added pressure on South Korean chipmakers.

China’s chip progress weighs on investor sentiment

Concerns among investors increased after reports that a state-owned Chinese company had started mass-producing domestically developed immersion deep-ultraviolet (DUV) lithography machines, a key technology for advanced chip manufacturing.Investor sentiment was also affected by the strong stock market debut of Chinese memory chipmaker ChangXin Memory Technologies, according to some analysts.The developments have added to worries around the future competitive landscape for Samsung and SK Hynix as they continue expanding their semiconductor operations.

South Korean chipmakers and AI partnerships

The push to expand AI-related semiconductor capabilities has also led South Korean technology companies to deepen cooperation with global technology firms.The chiefs of Samsung, SK and South Korean automaker Hyundai joined President Lee Jae Myung during his San Francisco trip last week, where they announced hundreds of billions of dollars in planned cooperation with major US technology companies.The agreements involve AI companies OpenAI and Anthropic, along with chip designers Nvidia and Broadcom, and cover chip technologies, data centres and other AI infrastructure.In a roundtable with foreign media last week, Kim Yong-beom, Lee’s chief policy adviser, said the initiatives show how global technology companies are seeking long-term partnerships with South Korean chipmakers to secure reliable supplies of memory chips for AI.