Samsung Electronics said in its preliminary results for the second quarter (April–June) that operating profit rose to 89,400 billion South Korean won, more than nineteen times the level of the same quarter a year earlier. Revenue for the period increased to 171 trillion won, up 129.3 percent year‑on‑year.
On a quarterly basis, operating profit grew 56.2 percent and revenue expanded 27.7 percent compared with the previous quarter. The company said it will publish a detailed financial report later in the month that will include net income.
Driver of the surge: AI‑related memory demand
Samsung attributed the exceptional results to strong demand for memory chips tied to artificial intelligence applications. The company is one of the few major chipmakers able to supply high‑bandwidth memory (HBM), critical components for AI server systems used by technology firms such as Nvidia, AMD and Google.
Samsung also reported increased interest in its foundry services from existing and potential clients — including BYD, Google, AMD and Tesla — as the boom in AI infrastructure places additional pressure on advanced manufacturing capacity worldwide, notably at Taiwan Semiconductor Manufacturing Company (TSMC).
Market reaction and investor concerns
Despite the upbeat numbers, Samsung’s shares fell by more than 9 percent by early afternoon trading on Tuesday, extending losses from the morning after the results were released. Rival SK Hynix’s stock slid about 9.1 percent, and the South Korean KOSPI index was down roughly 7.1 percent.
Investors expressed concern that the current upturn could be followed by a rapid expansion of capacity in the memory market, leading to oversupply and price pressure. Analysts expect worries over potential overinvestment in AI and the volatile market environment to persist until major U.S. technology firms report their earnings at the end of July, which should provide clearer demand signals.
Shinhan Bank noted in a Tuesday analysis that since June the concentration of investments into the semiconductor industry has begun to ease, and as second‑quarter corporate reports approach, investors have become more cautious. The bank also highlighted that market events affecting supply and demand — such as SpaceX’s inclusion in the Nasdaq‑100 and SK Hynix’s planned U.S. listing on Nasdaq on July 10 — are likely to amplify price swings.
Government‑backed capacity expansion
The results came one week after South Korean President Lee Jae Myung unveiled a joint investment program with Samsung and SK Hynix worth 800,000 billion won. The public‑private initiative aims to expand the country’s chip production capacity to maintain competitiveness in the global AI race and envisages construction of four new semiconductor fabs — two by Samsung and two by SK Hynix.
The government described the project as the most significant economic policy measure since Lee took office.
Conclusion
Samsung’s second‑quarter preliminary figures mark a historic record for operating profit and revenue, driven mainly by AI‑related memory demand. Nevertheless, investor caution over potential future oversupply and ongoing market volatility has weighed on share prices. The detailed financial report and upcoming earnings from large U.S. tech companies at the end of July are the next key events for assessing demand prospects.
