Seoul: Samsung Electronics Co. announced on Thursday that its net profit for the second quarter surged nearly 1,300 percent year-on-year, driven by robust demand for semiconductors linked to artificial intelligence (AI), which counterbalanced weaker earnings in its mobile division.
According to Yonhap News Agency, the South Korean tech giant reported a net profit of 71.62 trillion won (US$49.6 billion) for the April-June period, a significant increase from 5.11 trillion won a year earlier. Operating income also saw a remarkable rise, climbing 1,813.8 percent to 89.49 trillion won, while sales jumped 130 percent to 171.49 trillion won. This marked the third consecutive quarter of record-breaking revenue and operating profit for Samsung.
The reported figures aligned with market predictions, as the average analyst estimate for net profit was 71.21 trillion won, based on a survey by Yonhap Infomax, the financial data unit of Yonhap News Agency. Earnings per share reached 10,849 won for both common and preferred shares, up 52 percent from the previous quarter, positioning Samsung among the highest in global technology companies.
Samsung attributed its outstanding performance to leveraging its technological leadership in response to increasing market demand, especially for AI-related products. The semiconductor segment posted record sales of 127.5 trillion won and operating profit of 89.2 trillion won during the quarter, propelled by ongoing global investment in AI infrastructure, which has tightened semiconductor supplies and elevated memory chip prices.
Samsung anticipates sustained strong semiconductor demand in the latter half of the year, bolstering overall earnings growth. "In the second half of this year, the memory business expects robust demand centered on servers stemming from continued AI infrastructure capex and broader adoption of agentic AI," the company noted in a release.
Industry analysts foresee favorable conditions for the global chip market to persist into the next year. Samsung plans to optimize its product mix proactively for both DRAM and NAND flash memory, considering market demand shifts and evolving customer needs. Additionally, it expects the profitability of the foundry business to improve as it restructures its portfolio to concentrate on high-growth segments.
Capital expenditures in the second quarter amounted to 16.8 trillion won, an increase of 5.5 trillion won from the previous quarter, with 15.4 trillion won invested in the chip division and 700 billion won allocated to the display business. Samsung has benefited significantly from the AI boom, backed by its status as the world's largest memory chip producer.
Despite some analysts expressing concerns about the semiconductor industry's growth potentially peaking soon, Samsung has continued to secure long-term supply agreements with major tech firms and expand production to meet medium to long-term demand expectations. The company has also scaled up sales of higher-value products, having initiated mass production and shipments of sixth-generation high-bandwidth memory, or HBM4, chips.
However, the division responsible for mobile devices, TVs, and home appliances reported 48 trillion won in sales and an operating loss of 800 billion won, the first quarterly operating loss since the company's inception. While mobile business sales increased due to strong performance from flagship products like the Galaxy S26 series and the A series, operating profit declined, affected by rising costs for key components, including DRAM and NAND flash memory.
Samsung's home appliance and TV businesses also experienced an operating loss after weak global demand and higher raw material costs, exacerbated by conflicts in the Middle East. The company anticipates ongoing challenging business conditions amid global uncertainties and rising production costs and aims to enhance the competitiveness of its businesses while seeking structural improvements.