Samsung Electronics is expected to report a substantial increase in its second-quarter operating profit, with analysts forecasting an eighteen-fold jump from the previous year. This surge is attributed to the escalating demand for memory chips, particularly High-Bandwidth Memory (HBM), driven by the booming Artificial Intelligence sector. The anticipated operating profit for the April to June quarter is around 86 trillion won (approximately $72.6 billion), which would mark a third consecutive quarter of record profit for the company.
The robust demand from AI applications has led to a significant increase in memory chip prices. Citi Research reported that average selling prices for DRAM and NAND rose by 44 percent and 53 percent quarter-on-quarter, respectively, in Q2. JPMorgan notes that while memory supply-demand fundamentals remain tight, some investors question the sustainability of AI memory's rapidly rising share of cloud service providers' capital expenditure, which is estimated to be 52 percent in 2026 and projected to exceed 70 percent in 2027.
Despite the strong operational performance, analysts caution that Samsung's Q2 earnings could fall short of consensus expectations if the company books a larger-than-anticipated provision for employee bonuses. Samsung recently averted a large-scale strike by reaching a wage deal that allocates 10.5 percent of the semiconductor division's operating profit to special bonuses for chip employees. Cumulative bonus provisions could potentially exceed 40 trillion won, making the timing of their accounting recognition a key variable.
The strong performance of memory chipmakers, including Samsung Electronics, SK Hynix, and Micron, has seen their shares soar by 158 percent, 273 percent, and 242 percent, respectively, in 2026, pushing their market valuations above $1 trillion. This growth is not only due to HBM but also stronger demand for conventional DRAM and NAND products as AI applications expand. However, a significant risk to this memory boom is potential delays in AI infrastructure investment, which could negatively impact companies like Samsung and SK Hynix, who recently pledged to invest 3,200 trillion won ($2.7 trillion) to expand chip capacity in South Korea between 2026 and 2040.
