Samsung Posts Record Q2 Profit as AI Chip Boom Offsets Mobile Division Losses

SEOUL: South Korea’s Samsung Electronics reported a record second-quarter operating profit on Thursday, driven by soaring global demand for artificial intelligence (AI) memory chips, despite losses in its mobile business caused by rising component costs. The company also forecast that the global chip supply shortage would continue through 2028.

Samsung said its operating profit surged 19-fold year-on-year to a record 89.2 trillion won (about $61.7 billion) in the April–June quarter, while revenue more than doubled to 171.5 trillion won, marking the highest quarterly sales in the company’s history. The semiconductor division was the primary driver of growth, benefiting from strong demand for high-bandwidth memory (HBM) chips used in AI data centres.

The company said it has signed long-term supply agreements with the world’s five largest data centre operators and is negotiating similar deals with five more major customers. These multi-year contracts include advance payments and price guarantees aimed at reducing the volatility traditionally associated with the memory chip market.

Samsung’s mobile business, however, posted a 700 billion won operating loss, as higher semiconductor prices increased production costs for smartphones and other consumer devices. Despite the setback, the company expects AI-driven demand to remain robust, supporting continued growth in its semiconductor business.

The technology giant also said it expects its contract chip manufacturing (foundry) business to recover in the second half of the year. Production at its new semiconductor facility in Texas is scheduled to begin later this year, while a second U.S. fabrication plant is planned to enter mass production by 2030.

Despite the record earnings, Samsung shares slipped slightly as investors remained cautious about heavy capital spending and increasing competition in the AI semiconductor market, particularly from Chinese rivals.