Samsung profit surges past estimates on AI memory chip demand

[SEOUL] Samsung Electronics’s quarterly profit surged 19-times, soaring past elevated expectations due to rocketing demand for memory chips needed in artificial intelligence data centres.

The world’s largest memory maker reported preliminary operating income of 89.4 trillion won (US$58 billion) in the three months to June, dwarfing its performance for all of 2025. Analysts on average had projected 84.2 trillion won. Revenue came to 171 trillion won, against the average estimate of 169.2 trillion won.

Samsung is expected to release a full financial statement, including net income and divisional breakdowns, around the end of the month.

A shortage in memory chips remains a key bottleneck for AI development, executives including Nvidia chief Jensen Huang and OpenAI chief operating officer Brad Lightcap have said.

Manufacturers are giving priority to high-end memory development to meet data centres’ needs, leading to inadequate volumes of conventional memory as well.

Analysts expect shortages to last till 2027 at least, giving Samsung and rivals SK Hynix and Micron Technology enormous pricing power.

That’s lifted average DRAM selling prices more than 40 per cent in the April to June quarter from the previous three months, while NAND prices jumped more than 50 per cent, according to HSBC.

Samsung’s results are in the spotlight as investors try to gauge how long sky-high investments and valuations around AI will last.

Global semiconductor shares jumped to record levels earlier this year, but have hit turbulence on fears about increased competition, possible overcapacity and whether plans for hundreds of billions of US dollars in investment will pay off.

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Shares of Samsung, which has broad portfolio of chips and consumer electronic, have underperformed cross-town rival SK Hynix’s, which is more focused on high-end memory geared for AI’s computation needs. Samsung’s shares, which were hurt by a sell-off in the five days to Friday, are up 165 per cent this year, compared with SK Hynix’s roughly 260 per cent gain.

The two chipmakers are central to South Korea’s ambitions to pull ahead of other countries to take leadership in AI. Samsung Group and SK Group plan to build two chipmaking plants apiece in the nation’s southwest for a total of 800 trillion won to expand capacity quickly. The country aims to double its memory production capacity within five years.

For 2026, Samsung has announced plans to spend over US$70 billion in production capacity expansion and research.

Chipmakers are enjoying an unprecedented rise in demand for the high-bandwidth memory essential to AI accelerators. But the shift in production is in turn fomenting a historic shortage of conventional memory chips that go into most modern devices, squeezing profits and inflating price tags. BLOOMBERG