SEOUL, South Korea (AP) \u2014 South Korean technology giant Samsung Electronics on Thursday reported a record operating profit of 89.5 trillion won ($62 billion) for the April-June period, a day after crosstown rival SK Hynix also reported record earnings, as the world\u2019s two largest memory chipmakers continue to ride the global artificial intelligence boom.<\/p>\n
Despite their soaring profits, the companies\u2019 shares have fallen sharply this week in South Korea\u2019s volatile stock market, where retail investors often drive sharp swings in share prices, as concerns grow over their plans to spend massively on increasing manufacturing capacity and the prospects of intensifying competition from China.<\/p>\n
Samsung\u2019s second-quarter operating profit was a more than 19-fold increase from a year earlier, and nearly all of it came from its semiconductor business, which benefited from rising chip prices driven by demand for AI servers and increased shipments of advanced high-bandwidth memory chips used to power AI applications. That outweighed an operating loss in its mobile, TV and home appliances division, partly due to higher component costs. <\/p>\n
Samsung\u2019s quarterly revenue of 171.5 trillion won ($119 billion) was also an all-time high. The company said it expects demand for its memory products to remain strong in the second half of the year, driven by continued expansion of AI infrastructure and broader adoption of agentic AI. Demand for server chips is expected to accelerate further, keeping the market undersupplied, it said in a statement.<\/p>\n
Samsung\u2019s report came a day after SK Hynix also reported a record second-quarter revenue of 60.5 trillion won ($42 billion). However, SK Hynx\u2019s profit was still below the loftier market expectations and the company\u2019s shares declined by more than 9% on Wednesday. Samsung\u2019s share prices have also declined this week. <\/p>\n
Kim Jaejune, an executive of Samsung\u2019s memory chip division, said the company expects the gap between chip supply and demand to widen further in 2027. He said Samsung plans to begin construction of its second semiconductor fab in Taylor, Texas, before the end of this year, with the goal of starting production by 2030.<\/p>\n
Kim said Samsung has secured long-term chip supply contracts with what he called the \u201cfive major global data center clients\u201d \u2014 a possible reference to Amazon Web Services, Google, Meta, Oracle and Microsoft \u2013- and is in talks with other major technology companies as demand for AI infrastructure surges.<\/p>\n
\u201cDespite our efforts to increase production, demand growth is outpacing our efforts,\u201d he said in a conference call. <\/p>\n
<\/p>\n \n Sign up for Morning Wire: Samsung and SK Hynix together produce about two-thirds of the world\u2019s memory chips. While the companies have embarked on major investments in semiconductor manufacturing facilities and data centers as South Korea expands its AI ambitions,<\/a> some analysts say there are growing concerns<\/a> about whether such massive spending will ultimately generate sufficient returns.<\/p>\n Shares of South Korean chipmakers have also been pressured by concerns over intensifying competition from China, with reports that a state-owned Chinese company had begun mass-producing domestically developed immersion deep-ultraviolet (DUV) lithography machines, a key technology for advanced chipmaking. Investor concerns were also heightened by the strong stock market debut of Chinese memory chipmaker ChangXin Memory Technologies,<\/a> some analysts say. <\/p>\n
\n Our flagship newsletter breaks down the biggest headlines of the day.\n <\/p>\n