Samsung’s AI chip boom delivers record profit—and a mobile loss

Memory becomes the profit engine

Samsung Electronics posted second-quarter revenue of 171.5 trillion won and operating profit of 89.5 trillion won, both quarterly records, as AI infrastructure spending lifted demand for memory and server products.samsung +1 Revenue rose 28% from the previous quarter while operating profit climbed 56%, taking the operating margin to about 52%.investing +1 One market report said profit beat expectations even as revenue fell short of forecasts.scanx

The Device Solutions division generated 127.5 trillion won in revenue and 89.2 trillion won in operating profit, leaving semiconductors responsible for virtually all group profit.samsung Samsung said record memory results reflected limited capacity, higher industry pricing and a richer mix of server products. It also expanded HBM4 sales and shipped what it described as the industry’s first HBM4E samples to major customers.samsung

Expensive chips squeeze Samsung’s own phones

The same memory boom is cutting the other way inside Samsung. Its mobile and networks businesses recorded a 700 billion won operating loss despite solid sales of Galaxy S26 and A-series phones, as higher component costs overwhelmed the product mix.samsung +1 The division’s revenue was 33.2 trillion won, and Samsung expects pressure from rising costs and softer consumer demand to continue in the second half.samsung

That split makes the quarter less uniformly strong than the headline figures suggest. Samsung benefits when scarce memory commands higher prices, but it also buys those components for smartphones, televisions and other devices. The company plans to lean harder on premium phones, foldables and AI features while pursuing operating efficiencies to protect margins.samsung +1

Tight supply supports the outlook—and raises the stakes

Samsung expects demand for server DRAM, enterprise solid-state drives and high-bandwidth memory to accelerate as spending on AI infrastructure continues. Management said HBM4 sales should more than triple sequentially in the third quarter and represent well over 60% of HBM revenue during the second half.investing It is also directing most capital expenditure toward chips: Device Solutions received 15.4 trillion won of the quarter’s 16.8 trillion won total.investing

The bullish case rests on supply staying constrained while hyperscalers keep building. Samsung says shortages could persist through 2028 and is expanding multi-year agreements with data-center customers.investing The risk is increasing concentration: if AI capital spending cools, the extraordinary memory earnings supporting the group would be difficult for loss-making consumer units to replace. For now, Samsung is spending into that bet, including a record 16 trillion won on research and development during the quarter.investing