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Samsung Electronics said in a regulatory filing Thursday that second-quarter operating profit reached a record 89.5 trillion won. Its Device Solutions chip arm supplied 89.2 trillion won of that total as AI server demand lifted memory prices. Seoul Economic Daily said surging memory prices, falling demand and rising raw-material prices contributed to Device eXperience's first quarterly loss since records began in 2011.
What Changed
- Samsung Electronics reported a record 89.5 trillion won second-quarter operating profit, up 1,813.8% year on year to roughly $62 billion, with 89.2 trillion won of it from the Device Solutions chip arm.
- The Device eXperience division, which covers phones, TVs and appliances, swung from a 4.7 trillion won profit a year earlier to an 800 billion won loss, its first quarterly loss since records began in 2011.
- Counterpoint Research found smartphone memory prices rose more than 80% from the first quarter, with component costs up 70% for entry-level phones and 50% for premium models year on year.
- Samsung told investors the memory shortage is likely to intensify in 2027 and persist into 2028, and said long-term contracts with five data-center customers should cover 60% to 70% of its medium- and long-term production plans once five more deals close.
AI-generated summary, reviewed by an editor. More on our AI guidelines.
Samsung's 89.2 Trillion Won Chip Quarter
Operating profit rose 1,813.8% year on year to roughly $62 billion. It beat the 88.13 trillion won LSEG SmartEstimates forecast, while revenue of 171.5 trillion won missed the 172.65 trillion won consensus. Device Solutions generated 127.5 trillion won in revenue, up 357% from a year earlier. Seoul Economic Daily ranked the profit first among global tech companies, ahead of Nvidia at $53.5 billion and Apple at $50.85 billion.
DRAMeXchange put the price of a benchmark DRAM chip at $21 at the end of June. The same chip cost $2.60 a year earlier and $13 at the end of March. Samsung said DRAM and NAND sales increased as servers took their largest share of the memory mix. HBM4 sales expanded, and the company shipped the industry's first HBM4E samples to major customers. HBM4 is Samsung's sixth-generation high-bandwidth memory designed for AI processors such as Nvidia's Vera Rubin platform.
Device eXperience's 800 Billion Won Loss
The Device eXperience division swung from a 4.7 trillion won profit a year earlier to an 800 billion won loss, according to the Korea Times. Samsung's results put the mobile and networks loss at 700 billion won, even as Galaxy S26 and Galaxy A sales lifted revenue from the year-earlier period.
Counterpoint Research found that smartphone memory prices rose more than 80% from the first quarter. Component costs increased 70% for entry-level phones and 50% for premium models from a year earlier. Daniel Araujo, a Samsung mobile vice president, said demand from AI servers was creating mobile-memory shortages and that the cost burden would continue through the second half. eToro analyst Josh Gilbert said the consumer electronics unit was “squeezed by the very component prices driving the semiconductor boom.”
Memory Shortage Through 2028
Samsung told investors that new fabs take more than three and a half years to produce wafers, leaving the shortage likely to intensify in 2027 and persist into 2028. Memory executive Kim Jaejune said demand growth was outpacing Samsung's production increases.
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The Korea Herald said Samsung has completed long-term agreements with five major global data-center customers and is in final-stage talks with five additional large customers tied to AI demand. The contracts begin with five-year terms, and Samsung expects them to cover 60% to 70% of its medium- and long-term production plans once the additional deals close.
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Taylor Fab 2 by Year-End
Bloomberg said Samsung shares rose as much as 8.4% Thursday before paring most gains. CNBC put the close 0.72% lower. Fibonacci Asset Management Global founder Jung In Yun said Samsung's recovery and potentially more aggressive pricing could pressure SK Hynix. He said industry-wide capacity investments kept concerns about a future supply correction alive. Bloomberg also cited rising debt and investor concern that companies such as Meta may be building more data centers than they need.
The Associated Press tied pressure on South Korean chipmakers' shares to intensifying Chinese competition. It cited reports that a state-owned Chinese company had begun mass-producing domestically developed immersion DUV lithography equipment. Some analysts also pointed to Chinese memory maker ChangXin Memory Technologies' strong market debut.
Samsung plans to begin construction of its second Taylor, Texas, fab by year-end. It targets mass production there in 2030.
Frequently Asked Questions
How much did Samsung earn in the second quarter of 2026?
Samsung Electronics reported operating profit of 89.5 trillion won, roughly $62 billion, a record and an increase of 1,813.8% from a year earlier. Revenue was 171.5 trillion won. The profit beat the 88.13 trillion won LSEG SmartEstimates forecast, while revenue fell short of the 172.65 trillion won consensus.
Why did Samsung's device division lose money?
The same memory prices that lifted Samsung's chip profit raised the cost of components in its own phones. Counterpoint Research found smartphone memory prices rose more than 80% from the first quarter. The Device eXperience division posted an 800 billion won operating loss, and Samsung's results put the mobile and networks loss at 700 billion won.
Is this the first loss Samsung's device business has ever posted?
Seoul Economic Daily reported it is the first quarterly loss since records began in 2011, covering both the Device eXperience division created in 2021 and the earlier mobile and consumer electronics divisions.
How long does Samsung expect the memory shortage to last?
Samsung told investors that new fabs take more than three and a half years to reach wafer production, leaving the shortage likely to intensify in 2027 and persist into 2028. Memory executive Kim Jaejune said demand growth was outpacing the company's production increases.
What is Samsung building in Taylor, Texas?
Samsung plans to begin construction of a second fab in Taylor by year-end and targets mass production there in 2030.
AI-generated summary, reviewed by an editor. More on our AI guidelines.
Marcus Schuler
Editor-in-Chief and founder of Implicator.ai. Former ARD correspondent and senior broadcast journalist with 10+ years covering tech. Writes daily briefings on policy and market developments. Based in San Francisco. E-mail: editor@implicator.ai
