Samsung Electronics Co., Ltd. reported its financial results for the second quarter of 2026, revealing a record net profit of 71.63 trillion South Korean won (approximately $496.4 billion USD), a nearly 13-fold surge compared to the same period last year. This dramatic increase was fueled by robust demand for artificial intelligence (AI) chips.
Samsung Electronics Co., Ltd. also projected that the global shortage of memory chips will persist until 2028. The company plans to lock in the majority of its production capacity through multi-year agreements to ensure supply stability. Data shows that the company's second-quarter revenue reached 171.50 trillion won, doubling year-on-year, while operating profit soared 18 times to 89.49 trillion won. The semiconductor division served as the primary engine of this performance, posting an operating profit of 89.20 trillion won for the quarter, contributing the vast majority of the company's earnings. In contrast, the mobile and home appliance divisions recorded a slight operating loss, impacted by higher procurement costs for components like chips. Buoyed by these strong results and an optimistic outlook, the company's stock price closed more than 8% higher on the day.
Addressing the industry's supply and demand outlook, Samsung Electronics Co., Ltd.'s Vice President and Head of Memory Business, Kim Jae-joon, stated during an earnings call that the supply gap caused by computing power demand is accumulating annually. He noted that unmet market demand this year will be pushed to the next year, and expects chip supply tightness to worsen in 2027 and continue through 2028. Kim added that customers are actively seeking to sign multi-year supply contracts to ensure stable deliveries. Samsung Electronics Co., Ltd. expects to secure 60% to 70% of its total chip production capacity through five-year contracts. The company has already finalized long-term agreements with five major global AI data center clients and is negotiating final details with five others.
Regarding capacity expansion and strategic partnerships, Samsung Electronics Co., Ltd. announced plans to break ground on its second wafer fabrication plant in Taylor, Texas, by the end of 2026, targeting mass production by 2030. Construction of the first plant is progressing smoothly and is expected to begin production this year. Furthermore, Samsung Electronics Co., Ltd. has signed a memorandum of understanding with U.S. chip designer Broadcom Inc. to collaborate on the supply of next-generation high-bandwidth memory (HBM) for AI applications. The partnership is expected to generate transaction volumes exceeding $200 billion USD over a five-year period leading up to 2030.
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