Samsung Electronics is expected to report an 18-fold jump in second-quarter operating profit to 86 trillion won ($56.35 billion), marking a third consecutive record quarter as the AI-driven memory shortage continues to intensify.
The world's largest memory chipmaker by sales is set to flag the results on Tuesday, according to an LSEG SmartEstimate based on 30 analyst forecasts. The figure would represent a staggering leap from 4.7 trillion won a year earlier and builds on a Q1 2026 record of 57 trillion won.
The AI Memory Boom Rolls On
The prolonged memory undersupply stems from booming demand for AI inference infrastructure, which continues to outpace supply growth from global manufacturers. Critically, analysts expect the market to remain undersupplied at least through next year.
Unlike earlier AI booms driven primarily by training large models, the current cycle is fueled by the rise of agentic AI — systems that perform complex, multi-step tasks requiring additional memory for server processors and greater storage capacity to retain and retrieve data during inference.
Samsung is a key supplier to Nvidia, Google, and Apple. Citi Research reported that average selling prices for DRAM and NAND rose 44% and 53% quarter-on-quarter respectively in Q2.
Nomura expects commodity DRAM prices to rise another 24% and NAND prices 25% in the July-September quarter, supported by demand from both traditional data centers and AI-specific infrastructure.
A $1 Trillion Club
The memory shortage has fueled an extraordinary stock rally. Samsung, SK Hynix, and Micron have surged 158%, 273%, and 242% respectively this year, propelling all three companies above $1 trillion in market valuation.
SK Hynix last week pledged to invest 3,200 trillion won ($2.07 trillion) to expand chip capacity in South Korea, though the company gave no detailed timeframe.
The Risks: Unsustainable Spending?
Despite the euphoria, analysts are beginning to sound cautious notes. JPMorgan noted that while investors broadly agree memory supply-demand fundamentals remain tight, many question whether AI memory's rapidly rising share of cloud service providers' capital expenditure — estimated at 52% this year and expected to exceed 70% next year — is sustainable.
"Any drop in AI spending could come back to haunt Samsung and SK Hynix," the bank cautioned.
Investors are seeking clearer evidence that advances in AI services will translate into faster growth in cloud computing and related revenues, justifying the accelerating allocation to memory hardware.
A Labor Peace Dividend
In late May, Samsung averted a large-scale strike by reaching a wage deal that allocates 10.5% of the semiconductor division's operating profit to special bonuses for chip employees. Some analysts estimate Samsung's cumulative bonus provisions could exceed 40 trillion won, making the timing of accounting recognition a key variable for quarterly results.
Squeezed From the Other Side
Samsung's mobile business, meanwhile, faces mounting cost pressures as rising memory prices squeeze margins. Higher component costs have more than offset recent handset price increases, and analysts say further price increases may be needed in the second half of the year. Apple raised iPad and MacBook prices last month for similar reasons.
Samsung will announce detailed Q2 earnings later this month. The company said in April it has signed multi-year binding contracts with customers hoping to lock in memory supplies, though it has not disclosed identities or terms.
