South Korean technology giant Samsung Electronics reported a historic second quarter on Thursday, with net profit soaring nearly 1,300 percent year-on-year to 71.62 trillion won (approximately $49.6 billion), driven almost entirely by surging global demand for artificial intelligence chips. Operating profit reached 89.49 trillion won — an increase of more than 1,800 percent compared to the same period last year — while quarterly revenue climbed 130 percent to 171.49 trillion won, marking the company's third consecutive quarter of record sales and operating profit.

The extraordinary results were powered by Samsung's semiconductor division, which recorded sales of 127.5 trillion won and operating profit of 89.2 trillion won for the quarter. Sustained global investment in AI infrastructure has tightened chip supplies and kept memory prices elevated, directly benefiting Samsung as the world's largest memory chip producer. The company also became the first in the industry to begin mass production and shipments of sixth-generation high-bandwidth memory chips, known as HBM4 — a technology critical to powering AI applications in data centres. Samsung said it expects the supply-demand gap to widen further into next year, with server chip demand set to accelerate as AI infrastructure spending continues and so-called agentic AI sees broader adoption.

Not all parts of the business fared as well. Samsung's division covering mobile devices, televisions and home appliances reported an operating loss of 800 billion won — its first quarterly operating loss since the company's founding. Surging prices for DRAM and NAND flash memory, ironically a consequence of the same chip boom benefiting its semiconductor arm, drove up component costs for the mobile unit. Home appliance and TV businesses were also hurt by weak global demand and higher raw material costs linked to Middle East conflicts.

Samsung's strong results come a day after crosstown rival SK Hynix — together the two companies produce roughly two-thirds of the world's memory chips — also reported record quarterly revenue. Both firms last month announced a combined investment plan of 800 trillion won ($554 billion) to build a new chipmaking hub in South Korea's southwest. South Korean President Lee Jae Myung recently led a delegation including Samsung and SK Hynix executives to San Francisco, where agreements were signed with major US technology firms including Nvidia, Broadcom, OpenAI and Anthropic spanning chip supply, data centres and broader AI infrastructure.

Despite the blockbuster earnings, shares in both chipmakers have fallen sharply this week, reflecting investor unease about the scale of capital spending required to sustain growth and the long-term returns it may generate. Analysts also point to mounting competition from China, including reports of a state-owned Chinese company beginning mass production of advanced lithography machines — key equipment for chipmaking — and a strong stock market debut for Chinese memory chipmaker ChangXin Memory Technologies. As one Seoul-based semiconductor analyst noted, investors appear to be shifting focus from near-term earnings beats toward questions of long-term sustainability in a rapidly evolving global AI landscape.