The semiconductor division posted an operating profit of US$61.1 billion
[SEOUL] Samsung Electronics said on Thursday (Jul 30) AI chip demand remained strong and could exacerbate supply shortages in 2027, countering investor concerns that feverish AI spending by major technology firms may slow and curb growth.
The world’s top memory chipmaker posted a more than 250-fold rise in semiconductor profit in the second quarter, marking a sharp turnaround as it races to catch up with SK Hynix in supplying high bandwidth memory (HBM) chips used in AI processors.
“The supply shortage in 2027 is expected to worsen compared to this year, and it is expected to continue in 2028,” Kim Jaejune, executive vice-president of Samsung’s memory business, told analysts on a call.
Samsung shares surged 8 per cent and SK Hynix shares rebounded 3 per cent in early trading after the earnings call. That follows a sharp slide in recent months, as chip stocks have lost momentum amid investor concerns about funding for the AI infrastructure buildout and competition from China that could put chip earnings under pressure.
Kim said demand that could not be met in 2026 was being pushed into 2027 because of tight supply and this could add to future supply constraints.
“In H2 2026, the memory business expects robust demand centred on servers stemming from continued AI infrastructure capex and broader adoption of agentic AI,” Samsung said in a statement.
“This is projected to keep the market undersupplied, despite partial demand moderation in mobile and PCs.”
Samsung’s semiconductor division posted an operating profit of 89.2 trillion won (US$61.7 billion) in the second quarter, up over 250-fold from a year earlier.
However, those surging chip prices hurt Samsung’s mobile division, which reported a 700 billion won loss, its first quarter in the red.
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“The chips enriching one side of Samsung are now hurting the other, leaving the group more exposed than ever to memory pricing and the durability of hyperscaler demand,” said Josh Gilbert, an analyst at eToro.
Samsung reported operating profit of 89.5 trillion won for the April-to-June period, in line with its estimate of 89.4 trillion won and up from 4.68 trillion won a year earlier.
The South Korean company’s revenue rose 130 per cent to 171.5 trillion won in the quarter from a year earlier.
Samsung’s cross-town rival SK Hynix on Wednesday reported bumper quarterly results but fell short of lofty investor expectations. It flagged plans to raise capital spending this year by around 50 per cent to meet surging AI demand. REUTERS
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