Samsung Q2 Profit Seen Soaring as AI Memory Demand Keeps Chip Prices Elevated

Samsung Electronics is expected to report another record-breaking quarter as booming artificial intelligence (AI) demand continues to fuel higher memory chip prices and tighten global supply. Analysts estimate the South Korean tech giant’s operating profit surged about 18-fold year over year in the second quarter, highlighting the strength of the AI-driven semiconductor market.

According to an LSEG SmartEstimate based on forecasts from 30 analysts, Samsung is projected to post an operating profit of 86 trillion won ($56.35 billion) for the April-to-June period, up sharply from 4.7 trillion won a year earlier. If confirmed, it would mark the company’s third consecutive quarter of record operating earnings.

The expected growth reflects a prolonged shortage of memory chips, as demand for AI infrastructure continues to outpace production capacity. Industry analysts believe the memory market will remain undersupplied through at least next year, keeping prices elevated for both DRAM and NAND flash memory.

While high-bandwidth memory (HBM) remains a major growth driver, demand for conventional memory chips has also accelerated as AI applications become more advanced. The expansion of agentic AI, which performs complex, multi-step tasks, is increasing the need for larger memory capacity in servers and greater storage for data retrieval during AI inference.

Samsung supplies memory chips to major technology companies, including Nvidia, Google, and Apple, positioning it to benefit directly from the ongoing AI investment cycle.

Citi Research estimated that average selling prices for DRAM climbed 44% quarter over quarter in the second quarter, while NAND prices jumped 53%, underscoring the pricing power enjoyed by memory manufacturers.

The AI-driven rally has also boosted semiconductor stocks. Samsung Electronics, SK Hynix, and Micron have gained approximately 158%, 273%, and 242%, respectively, this year, pushing the market value of all three companies above the $1 trillion mark.

Despite the strong outlook, analysts caution that Samsung’s reported earnings could come in below expectations if the company records a larger-than-anticipated provision for employee bonuses. Following a wage agreement reached in late May that avoided a major strike, Samsung committed to allocating 10.5% of its semiconductor division’s operating profit toward special bonuses for chip employees. Some analysts estimate total bonus provisions could exceed 40 trillion won, making the accounting treatment a key factor in second-quarter results.

Samsung will release its full earnings report later this month, providing investors with additional details on profitability and future guidance.

Looking ahead, analysts identify any slowdown in AI infrastructure spending as the biggest threat to the current memory boom. JPMorgan recently noted that while supply-demand fundamentals remain favorable, investors are increasingly questioning whether cloud providers can sustain the rapid increase in AI memory spending. AI memory is estimated to account for 52% of cloud providers’ capital expenditure this year and could exceed 70% next year.

A decline in AI investment could affect Samsung and SK Hynix, both of which recently announced plans to expand semiconductor manufacturing capacity in South Korea. Samsung expects to invest 3,200 trillion won ($2.07 trillion) between 2026 and 2040, while SK Hynix has not disclosed a detailed investment timeline.

To secure future demand, Samsung said earlier this year that it signed multi-year binding agreements with customers to lock in memory chip supply, although it did not reveal the contract terms or customer names.

Nomura also expects the favorable pricing environment to continue, forecasting commodity DRAM prices to rise another 24% and NAND prices 25% in the July-to-September quarter, supported by demand from both consumer devices and AI-powered data centers.

Meanwhile, Samsung’s smartphone business is facing growing cost pressures as rising memory prices increase production expenses. Although the company has already raised handset prices, analysts believe additional price increases may be necessary during the second half of the year. Apple recently increased prices for several iPad and MacBook models, reflecting broader cost inflation across the technology industry.