Samsung Electronics is expected to report a dramatic rise in operating profit for the April-June quarter, reflecting a memory market that remains sharply undersupplied as AI-related demand grows.
Based on an LSEG SmartEstimate that aggregates forecasts from 30 analysts and weights those with the strongest track records, Samsung is likely to flag operating profit of about 86 trillion won for the second quarter. That figure would represent an increase from 4.7 trillion won in the same quarter a year earlier - roughly an 18-fold jump - and, if realized, would mark a third straight quarter of record operating profit for the company.
Market participants attribute the surge to a prolonged shortage in memory chips as demand for AI inference infrastructure continues to outpace supply capacity from global memory manufacturers. The undersupply is expected by analysts to persist at least through next year.
What is driving the boom
The recent strength in memory has been broad-based. While high-bandwidth memory (HBM) has been a significant contributor, conventional DRAM and NAND products have also seen stronger demand as AI applications diversify. Analysts point out that agentic AI - systems designed to carry out more complex, multi-step tasks - places additional memory and storage demands on servers during inference, not just on training systems. These inference workloads increase the memory footprint required by processors and the storage needed to retain and retrieve data, helping to propel prices across several memory categories.
Samsung is a major supplier of memory components to large technology firms, including Nvidia, Google and Apple.
Price moves and market reaction
Citi Research reported notable price momentum in the second quarter, estimating that average selling prices for DRAM and NAND rose 44% and 53% quarter-on-quarter, respectively. The persistent shortage has catalyzed a strong rally in semiconductor equities this year: Samsung Electronics, SK Hynix and Micron have climbed 158%, 273% and 242%, respectively, lifting each of them above $1 trillion in market value.
Accounting and bonus timing could change the headline number
Despite the favorable operating environment, analysts have cautioned that second-quarter results could fall short of consensus if Samsung records a larger-than-expected provision for employee bonuses in the quarter. In late May, Samsung reached a wage agreement that averted a large-scale strike and allocates 10.5% of the semiconductor division's operating profit to special bonuses for chip workers. Some analysts have suggested that Samsung's cumulative bonus provisions could exceed 40 trillion won, meaning the timing of when those provisions are recognized in accounting terms could materially affect reported quarterly operating profit.
Samsung is scheduled to provide detailed earnings later this month.
Risks and investment considerations
Looking ahead, the key risk identified by analysts is a potential slowdown or delay in AI infrastructure spending. JPMorgan has noted that while supply-demand fundamentals appear tight, questions remain about whether the rapidly increasing share of cloud service providers' capital expenditure devoted to AI memory - estimated at 52% this year and projected to exceed 70% next year - can be sustained. Any pullback in AI investment could have significant consequences for memory suppliers, including Samsung and SK Hynix.
Both Samsung and SK Hynix have announced large-scale capacity plans. Collectively, they pledged to invest 3,200 trillion won to expand chip capacity in South Korea. Samsung has indicated it expects to make that investment between 2026 and 2040; SK Hynix has not provided a detailed timeframe for its portion of the commitment.
Investors are also looking for clearer evidence that advances in AI services will translate into accelerated growth in cloud computing and related AI revenues that can justify memory's expanding capital-expenditure share, JPMorgan said.
Contracts, near-term price outlook and mobile margin pressure
In April, Samsung said it had signed multi-year binding contracts with customers designed to secure supply, though it did not disclose customer identities or contract terms. On prices, Nomura has projected that commodity DRAM prices could rise 24% quarter-on-quarter and NAND prices could increase 25% in the July-September quarter, supported by stronger demand for consumer memory products and chips for both traditional and AI data centers.
Meanwhile, Samsung's mobile division is experiencing cost pressure as higher memory prices have tightened margins. Rising component costs have more than offset recent handset price increases, and analysts say further price hikes for smartphones may be necessary in the second half of the year despite earlier increases. The article notes that Apple recently raised prices on iPads and MacBooks.
Exchange rate reference
The article uses an exchange rate of $1 = 1,526.2500 won for U.S. dollar-won conversions mentioned.