{"slug": "samsung-s-ai-boom-delivers-record-chip-earnings-but-there-s-a-catch", "title": "Samsung's AI Boom Delivers Record Chip Earnings. But There's a Catch", "summary": "Samsung reported record second-quarter earnings from its semiconductor division, driven by surging global demand for AI server memory chips, but the AI boom is also exposing weaknesses in its foundry business and raising memory costs that are eating into smartphone profits. The company's memory business was the biggest winner, while its foundry business remains a distant second to TSMC, and rising memory prices are pressuring profitability in its Mobile eXperience and Networks division.", "body_md": "# Samsung's AI Boom Delivers Record Chip Earnings. But There's a Catch\n\nArtificial intelligence is making Samsung richer. But it's also making parts of its business more difficult.\n\nThe South Korean tech giant reported record second-quarter earnings from its semiconductor division, as surging global demand for AI server memory chips sent revenue and profits to all-time highs.\n\nYet beneath the blockbuster numbers lies a more complicated story. The same AI boom that's supercharging Samsung's chip business is exposing weaknesses elsewhere—from its struggle to catch foundry leader TSMC to rising memory costs that are eating into smartphone profits.\n\nThe biggest winner was Samsung's memory business.\n\nAs AI companies race to build larger and more powerful data centres, demand for high-bandwidth memory (HBM)—a critical component used in AI chips—has surged, driving one of the strongest quarters in the company's history.\n\nSamsung's foundry business, however, remains a work in progress. The company said demand for AI-related chips and progress in its 2-nanometre manufacturing technology helped improve factory utilisation during the quarter. Executives also expressed confidence that the business could return to profitability as orders for advanced chips increase.\n\n## Greening the Future\n\n23 Jul 2026 - Vol 05 | Issue 30\n\nSecuring a sustainable India\n\n[Read Now Greening the Future](/magazine/greening-the-future)\n\nBut the challenge remains formidable. TSMC continues to dominate the global foundry market with more than 70% market share, while Samsung remains a distant second.\n\nRather than competing on manufacturing alone, Samsung is betting on an integrated strategy—combining memory, foundry services and advanced chip packaging under one roof. Industry experts believe this could become a key advantage as next-generation AI chips require tighter integration between computing, memory and packaging technologies.\n\nIronically, the AI boom is also hurting another part of Samsung's empire. Its Mobile eXperience and Networks division posted higher revenue, helped by healthy demand for the Galaxy S26 and Galaxy A series smartphones. However, profitability came under pressure as soaring memory prices—driven by AI server demand—increased production costs.\n\nSamsung said the shortage of mobile memory chips has pushed up component prices and is expected to remain a headwind through the second half of the year. To offset the impact, the company plans tighter control over procurement, sales and research spending.\n\nFor Samsung, the AI revolution is proving to be both a tailwind and a test. It has created a record-breaking semiconductor business. Now the company must ensure that the same boom doesn't slow down the rest of its empire.\n\n*(With inputs from ANI)*", "url": "https://wpnews.pro/news/samsung-s-ai-boom-delivers-record-chip-earnings-but-there-s-a-catch", "canonical_source": "https://openthemagazine.com/business/samsungs-ai-boom-delivers-record-chip-earnings-but-theres-a-catch", "published_at": "2026-07-30 12:45:09+00:00", "updated_at": "2026-07-30 13:06:11.310293+00:00", "lang": "en", "topics": ["artificial-intelligence", "ai-chips", "ai-infrastructure", "ai-startups", "ai-products"], "entities": ["Samsung", "TSMC", "Galaxy S26", "Galaxy A series", "Mobile eXperience and Networks division"], "alternates": {"html": "https://wpnews.pro/news/samsung-s-ai-boom-delivers-record-chip-earnings-but-there-s-a-catch", "markdown": "https://wpnews.pro/news/samsung-s-ai-boom-delivers-record-chip-earnings-but-there-s-a-catch.md", "text": "https://wpnews.pro/news/samsung-s-ai-boom-delivers-record-chip-earnings-but-there-s-a-catch.txt", "jsonld": "https://wpnews.pro/news/samsung-s-ai-boom-delivers-record-chip-earnings-but-there-s-a-catch.jsonld"}}