Samsung Electronics reported an operating profit of 89.5 trillion won ($62 billion) for the April-June quarter, a more than 1,800-per-cent jump from a year earlier, as the artificial-intelligence boom drove record revenue and profit in its chip business. Net profit soared nearly 1,300 per cent to 71.6 trillion won, while revenue climbed 130 per cent to 171.5 trillion won, meeting market expectations according to South Korea’s Yonhap news agency. The semiconductor division alone generated 127.5 trillion won in revenue and 89.2 trillion won in operating profit, benefiting from sharply higher prices for high-bandwidth memory (HBM) and other chips used in AI servers.

The bumper results masked a sharp deterioration elsewhere: the mobile, television and home appliances division posted an operating loss of 800 billion won, squeezed by the very component-price surge that supercharged the chip unit. Markets, however, seized on risks beyond the income statement. Samsung shares fell more than 12 per cent on Wednesday and SK Hynix, its domestic rival, lost nearly 20 per cent, as traders unwind AI bets. The Kospi index has tumbled 40 per cent from June peaks, with investors rattled by combined investment pledges of 800 trillion won by Samsung and SK Hynix for new fabrication plants, and by reports that Chinese state-owned firms have begun mass-producing advanced lithography machines.

Executives argued that demand will outstrip supply for years. Chief financial officer Park Soon-cheol told an earnings call that the global memory-chip shortage would deepen in 2027 and remain tight through 2028, while vice-president Jeejun Kim said five-year supply contracts now cover 60–70 per cent of future output, locking in prepayments and minimum prices. Samsung also announced a strategic HBM collaboration with Broadcom worth more than $200 billion over the next five years, a move analysts see as a bid to diversify beyond Nvidia. Counterpoint’s MS Hwang said Samsung is “leveraging its strong position in memory to aggressively capture share”, but Hyundai Research Institute’s Joo Won cautioned that “the biggest risk is that the semiconductor supercycle could be over by the time” the massive new capacity is ready.

For now, the earnings momentum is expected to persist. Samsung forecast robust server demand in the second half, fuelled by infrastructure spending and the spread of agentic AI systems. Its first chip plant in Taylor, Texas, remains on track to begin operations this year; a second facility is to start construction later in 2026. The South Korean government, which held an emergency meeting on the market gyrations, plans to use what President Lee Jae Myung called a “golden window” to channel investment into advanced chip fabrication.