Samsung Electronics reported second-quarter operating profit that exceeded market expectations, primarily driven by demand for AI servers and continued expansion of its memory chip business. The company stated that revenue and operating profit were largely in line with its guidance given earlier this month, indicating that investments in AI infrastructure continue to support its core semiconductor business.
Second-quarter profits hit a new high
According to the company's disclosure, Samsung's revenue in the second quarter was 171.5 trillion won, lower than the market expectation of 172.65 trillion won; operating profit was 89.5 trillion won, higher than the expected 88.13 trillion won.
- Revenue increased by 130% year-on-year.
- Operating profit increased by 1814% year-on-year.
- Operating profit increased by more than 56% quarter-on-quarter.
The company stated that demand for AI servers was the primary driver of record-breaking storage business, propelling DRAM and NAND sales to all-time highs. These chips are widely used in smartphones, automotive systems, and servers, with server demand showing the most significant growth.
HBM4 shipments expand
Samsung says it has expanded sales of its HBM4 as AI demand rises, and has provided the industry’s first HBM4E samples to major customers. The HBM4 is Samsung’s sixth-generation high-bandwidth storage product, targeting next-generation AI processors, including NVIDIA’s Vera Rubin platform.
The company also stated that, in order to meet AI demand, its storage capital expenditure increased sequentially in the second quarter, with investment priorities including the new wafer fab in Pyeongtaek and other infrastructure projects, while continuing to advance advanced research and development.
Server demand will remain a key factor in the second half of the year.
Samsung anticipates that storage demand will remain server-centric in the second half of the year, with continued capital expenditure on AI infrastructure and the increasing adoption of Agentic AI driving demand for related chips. The company stated that it is closely monitoring the demand pacing for HBM and server DRAM and adjusting its product mix to support long-term AI needs.
Samsung also anticipates that the tight supply situation in the industry will continue into next year and may worsen further in 2027. With the rapid growth in AI token generation, there is still room for growth in demand for HBM, server DRAM, and enterprise-grade SSDs in the coming years.
The company stated that an increasing number of customers are seeking multi-year supply agreements to secure the capacity needed for AI infrastructure. Samsung said it has already signed agreements with the world's top five data center customers and is in final negotiations with five other large customers.
Responding to Rumors of a US Listing
Regarding the possibility of listing in the US, Samsung stated that it is not currently evaluating the issuance of ADRs. The company also stated that from a medium- to long-term shareholder value perspective, ADRs remain one of several options to consider in the future.
In addition to semiconductors, Samsung also mentioned that its robotics business has been brought under the direct management of the CEO. The company stated that robotics, like AI, is a key area for future growth, and it is exploring partnerships with startups and evaluating potential investment and M&A opportunities.
Additional information:Samsung's South Korean rival SK Hynix also announced record profits for the second quarter on the same day, but these fell short of analysts' expectations.
