Samsung Electronics is projected to announce an operating profit of 86 trillion won ($56.35 billion) for the April-June quarter, marking an 18-fold increase from the 4.7 trillion won reported a year prior. This would represent the third consecutive quarter of record operating profit for the company, largely due to a sustained memory shortage fueled by booming demand for AI inference infrastructure that continues to outpace global memory manufacturers' supply.
The robust profit growth is attributed to strong demand for high-bandwidth memory (HBM), as well as conventional DRAM and NAND products, especially as agentic AI applications expand into more complex computing tasks requiring greater memory and storage. Citi Research noted a 44% quarter-on-quarter rise in average selling prices for DRAM and a 53% increase for NAND in Q2. Nomura anticipates a further 24% and 25% price hike for commodity DRAM and NAND, respectively, in the July-September quarter due to continued demand from both traditional and AI data centers.
Analysts from LSEG SmartEstimate, based on forecasts from 30 analysts, weighted towards those with strong track records, provided the projected operating profit. They expect the memory market to remain undersupplied at least through 2027. Despite the strong projected earnings, a potential risk factor is the timing and size of bonus provisions for chip employees, following a wage deal in late May that allocated 10.5% of the semiconductor division's operating profit to special bonuses. Some estimates suggest cumulative bonus provisions could exceed 40 trillion won, which could impact the final Q2 earnings if booked significantly during the quarter.
While AI demand is a major driver, JPMorgan has questioned the sustainability of AI memory's rapidly increasing share of cloud service providers’ capital expenditure, estimated at 52% in 2026 and over 70% in 2027. Delays in AI infrastructure investment are seen as the biggest risk to the current memory boom. Samsung, a key supplier to tech giants like Nvidia, Google, and Apple, has already signed multi-year binding contracts to secure supplies. However, its mobile business faces challenges, with rising memory prices squeezing margins and potentially necessitating further smartphone price increases in the latter half of the year, following recent price adjustments by rivals like Apple.
