Samsung reports record profit as South Korean chipmakers benefit from AI boom
Samsung Electronics reported a record operating profit of 89.5 trillion won ($62 billion) for the April-June quarter on Thursday, a day after rival SK Hynix also reported record earnings, as the world's two largest memory chipmakers continue to benefit from surging demand linked to the global artificial intelligence boom.
Despite their soaring profits, shares of both companies have fallen sharply this week in South Korea's volatile stock market, where retail investors often drive sharp swings. Investors are increasingly concerned about the companies' plans to spend heavily on expanding manufacturing capacity and the prospect of intensifying competition from China.
Samsung's second-quarter operating profit was more than 19 times higher than a year earlier, with nearly all of it coming from its semiconductor business. The division benefited from rising chip prices driven by demand for AI servers and increased shipments of advanced high-bandwidth memory chips used in AI applications.
Those gains offset an operating loss in Samsung's mobile, TV and home appliance businesses, partly because of higher component costs.
Samsung's quarterly revenue also reached an all-time high of 171.5 trillion won ($119 billion). The company said it expects demand for memory products to remain strong in the second half of the year, driven by continued investment in 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.
Samsung's results came a day after SK Hynix reported record second-quarter revenue of 60.5 trillion won ($42 billion). However, SK Hynix's profit fell short of market expectations, and its shares declined by more than 9% on Monday. Samsung's shares have also fallen this week.
Both companies have announced major investments in semiconductor manufacturing facilities and data centers as South Korea seeks to expand its AI capabilities. But some analysts have raised concerns about whether such large spending plans will generate sufficient returns.
South Korean chipmakers have also faced pressure from concerns about growing competition from China. Reports that a state-owned Chinese company had begun mass-producing domestically developed immersion deep-ultraviolet lithography machines, a key technology for advanced chipmaking, have added to investor concerns.
The strong stock market debut of Chinese memory chipmaker ChangXin Memory Technologies has also heightened worries about competition from China, some analysts said.
(Source: PTI)
