Samsung likely to post 18-fold jump in profit on surging AI demand for memory

Samsung Electronics is poised to announce a dramatic surge in its second-quarter operating profit, with estimates pointing to an 18-fold increase year-on-year. This remarkable jump, projected at 8.6 trillion won ($56.35 billion), is largely attributed to the insatiable global demand for memory chips fueled by the artificial intelligence boom.

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the world's largest memory chipmaker by sales is likely to flag an operating profit of 86 trillion won ($56.35 billion) for the April to June quarter

The world's largest memory chipmaker by sales is set to report its third consecutive quarter of record operating profit. This sustained performance reflects a persistent memory shortage, as the burgeoning demand for AI inference infrastructure continues to outstrip the supply capabilities of global manufacturers. Analysts predict this tight market condition will persist at least through next year.

The robust growth is not solely dependent on high-bandwidth memory (HBM). Demand for conventional DRAM and NAND products is also strengthening as AI applications, particularly agentic AI, become more widespread across various computing workloads. Unlike earlier AI training phases, agentic AI systems require additional memory for server processors and greater storage capacity for data retrieval during inference, thus driving demand for Samsung's core products.

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this would mark a third consecutive quarter of record operating profit for Samsung, reflecting a prolonged memory shortage, as booming demand for AI inference infrastructure continues to outpace supply growth from global memory manufacturers.

Samsung, a critical supplier to tech giants like Nvidia, Google, and Apple, is benefiting significantly from these market dynamics. Average selling prices for DRAM and NAND reportedly rose substantially in the second quarter. This surge has propelled the shares of major memory chipmakers, including Samsung Electronics, SK Hynix, and Micron, to extraordinary gains this year, pushing their market valuations past the $1 trillion mark.

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Analysts expect the memory market to remain undersupplied at least through next year.

However, potential headwinds exist. Analysts caution that second-quarter earnings could be impacted by provisions for employee bonuses. Samsung recently averted a large-scale strike by agreeing to allocate 10.5% of its semiconductor division's operating profit to special bonuses. The exact accounting recognition of these provisions could influence the final earnings figures. Looking ahead, potential delays in AI infrastructure investment are seen as the primary risk to the ongoing memory market boom.

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average selling prices for DRAM and NAND rose 44 per cent and 53 per cent quarter-on-quarter, respectively, in the second quarter.