Samsung's First-Quarter 2026 Profit Surges More Than Sevenfold to Record High on AI Demand

A global buildout of generative-AI infrastructure has accelerated demand for advanced chips and high-bandwidth memory, or HBM, while supporting a recovery in conventional memory prices. The trend is crucial for Samsung Electronics, a leading supplier of memory chips and smartphones, because a rebound in its semiconductor business can lift group earnings even as higher component costs squeeze margins at its mobile division.

Samsung Electronics reported that second-quarter operating profit surged 1,813.8% from a year earlier, an increase of more than 18 times, as robust data-center spending fueled demand for AI chips, HBM and server memory. The mobile business faced mounting cost pressure from pricier memory and other components, underscoring the double-edged impact of the chip upcycle: stronger semiconductor earnings for Samsung, but weaker profitability for the company’s smartphones.

Samsung Electronics is a major global producer of HBM and DRAM chips and a leading contract chipmaker. It has invested in advanced processes in recent years to catch up with TSMC, but its foundry division has long been unprofitable. Expansion of AI data centers has fueled HBM demand and memory prices. A simultaneous turnaround in foundry earnings would indicate that the AI boom is also strengthening its semiconductor manufacturing business, with implications for global chip supplies and South Korean equities.

On July 7, Samsung issued preliminary second-quarter results showing revenue of 171 trillion won and operating profit of 89.4 trillion won, or about $58.5 billion. Operating profit surged 1,810.3% from a year earlier, beating the market estimate of 84.6 trillion won and Nvidia’s roughly $53.5 billion in the previous quarter. The foundry business turned profitable for the first time. However, Samsung shares closed down 6.92% at 296,000 won, while the KOSPI fell 4.9%.

Samsung Electronics is one of the world's leading memory-chip suppliers and has entered the supply chain for the high-bandwidth memory (HBM) used in NVIDIA GPUs. Generative AI has fueled demand for data-center accelerators, making HBM central to the memory industry's profit recovery while also affecting South Korean semiconductor exports and the global supply of AI chips.

Samsung Electronics' memory-chip division benefited from a surge in HBM demand in the first half of 2026, with reports putting its profit at nearly $91 billion. Samsung subsequently announced that employees in its semiconductor business would receive performance bonuses equal to 100% of their base salaries, showing that growth in AI memory orders has translated directly into divisional earnings and employee compensation.