Samsung Flags 18-Fold Profit Surge as AI Memory Demand Booms
Source: CNA Business
Samsung Electronics is expected to report an 18-fold jump in operating profit to approximately $56 billion for Q2 2026, driven by surging AI demand for memory chips. The record result marks the company's third consecutive quarterly record as agentic AI expands beyond training into broader computing workloads.
Samsung Electronics is expected to report an approximately 18-fold jump in operating profit to 86 trillion won ($56.35 billion) for the second quarter, according to analyst estimates compiled by LSEG. The record result, Samsung's third consecutive quarterly high, reflects a prolonged memory shortage as AI demand continues to strain global supply.
The robust growth extends beyond high-bandwidth memory (HBM) into conventional DRAM and NAND products. Analysts point to the expansion of agentic AI — systems that perform complex, multi-step tasks requiring additional memory for server processors and greater storage capacity — as a key driver. Citi Research estimates that DRAM and NAND average selling prices rose 44 per cent and 53 per cent quarter-on-quarter respectively in Q2.
Samsung shares have surged 158 per cent this year, joining SK Hynix (up 273 per cent) and Micron (up 242 per cent) in a rally that has pushed all three companies above $1 trillion in market valuation. The company is a key memory supplier to Nvidia, Google, and Apple, and has signed multi-year binding contracts with customers seeking to lock in supply. However, analysts at JPMorgan warn that AI memory's rapidly rising share of cloud capex — estimated at 52 per cent this year and projected to exceed 70 per cent next year — may not be sustainable.
On the cost side, Samsung averted a large-scale strike in May by reaching a wage deal allocating 10.5 per cent of the semiconductor division's operating profit to special bonuses for chip employees. Some analysts estimate cumulative bonus provisions could exceed 40 trillion won, making accounting timing a key variable for quarterly results. Meanwhile, rising memory prices are squeezing Samsung's mobile business margins, with further smartphone price increases likely in the second half.
Why it matters for Singapore: Samsung's record performance in AI memory is directly relevant to Singapore's position as a regional technology and manufacturing hub. Samsung has extensive operations in Singapore spanning consumer electronics, semiconductor distribution, and R&D. As AI demand continues to strain global memory supply chains, Singapore-based enterprises and data centre operators face continued upward pressure on hardware costs. The deepening AI memory cycle also reinforces the strategic importance of Singapore's semiconductor ecosystem and the government's push to secure AI infrastructure investments.