Samsung Reports Record Profit, Investors Respond with Share Price Drops

This marks the third consecutive fiscal quarter in which Samsung has recorded the highest figure in its corporate history. These are preliminary figures – more precise data, including net profit, Samsung intends to publish at the end of the month. Samsung will publish the net profit as well as the details of how the result was achieved at the end of the month. Samsung does not report the actual net profit separately in its financial report – as was also the case in earlier financial reports.

What Is Driving the Profit

The profit is driven by Samsung's semiconductor business and strong demand for RAM and memory. The high operating profit is primarily based on the持续 high demand for AI infrastructure. Revenue more than doubled to 171 trillion won. This places the profit expectation slightly above the figure previously anticipated by analysts.

According to Samsung, the operating profit presented exceeded the average analyst estimates by 6.2 percent. According to a survey conducted by the South Korean news agency Yonhap among economists, the operating profit now presented exceeded their estimates on average by 6.2 percent. The revenue forecast of 171 trillion won, however, fell just short of the expected 172.181 trillion won.

Why the Stock Market Is Not Cheering

Despite these figures, investors reacted disgruntled: Samsung Electronics' share price had dropped by nearly 7 percent by the close of trading on Tuesday. At one point, the price was down by around 10 percent. Despite the share's excellent performance this year, it nevertheless declined by nine percent. According to Bloomberg, the drop was attributable to the fact that the figures had been expected to be even higher.

According to Bloomberg, the price decline was primarily due to the fact that the presented figures were not significantly more above expectations. The share prices of South Korean chip competitors SK Hynix and Micron also fell. In June, SK Hynix had even displaced Samsung Electronics as the largest South Korean company by market capitalization – if only briefly. As of the current standing, Samsung is once again leading the ranking.

Bloomberg also sees uncertainty in the financial markets about what Samsung's figures mean for the further development of the AI industry. The reason for the rapidly rising profits is the ongoing boom surrounding artificial intelligence. Worldwide, demand for data centers and high-performance computer processors has literally exploded.

Samsung in Competition with SK Hynix

Samsung Electronics is one of the world's leading producers of semiconductors, particularly in the segment of high-performance memory chips – that very segment in which Samsung Electronics is regarded as the global market leader. The AI boom is causing data centers to require ever more memory. As a result, prices have risen sharply. Samsung is benefiting from the AI boom as one of three major South Korean memory manufacturers.

Compared to the same period last year, this represents an increase in operating profit of more than 1,800 percent. The operating result is 19 times that of the same period last year. Samsung Electronics is one of the three major South Korean memory manufacturers; besides Samsung, these are primarily SK Hynix and Micron.

At the same time, the rise in memory prices also has downsides for Samsung. Unlike Micron and SK Hynix, Samsung is also undermining other parts of its business with the high memory prices – for instance, through rising prices for smartphones, whose production is becoming more expensive.

Union, Strike, and Bonus Deal

At the end of May, members of the Samsung union accepted a compromise proposal from management following a strike threat, which provides for annual bonuses of several hundred thousand euros for each employee in the highly profitable semiconductor division. This made it possible to avert a multi-day strike in the semiconductor sector.

Industrial Policy and Distribution Debate

President Lee had at times criticized the demands of some semiconductor unions as "excessive." It was only at the end of June that South Korea's President Lee Jae Myung presented what is likely the largest industrial-policy project in the country's history. Accordingly, funds in the triple-digit billions are to be invested in chip production, data centers, and robotics. At the center is a semiconductor ecosystem, costing the equivalent of around 450 billion euros, in the southwest of the country, which is being built predominantly by Samsung Electronics and SK Hynix.

In South Korea, the extremely high corporate profits of the major semiconductor producers Samsung Electronics and SK Hynix have led to a publicly debated question of distribution. While the country's tech companies are benefiting from sustained AI demand and paying high wages and bonuses, many other South Korean industries are currently performing unevenly.

For instance, the unemployment rate in the particularly affected age group under 30 has risen significantly of late. This gap between the record profits of the chip industry and the situation in other sectors – particularly among young employees – is shaping the domestic political debate in the country.

Internationally, the expansion of AI infrastructure is also increasingly meeting resistance. For example, in the USA there is now massive pushback from residents against the construction of AI data centers. Samsung is not only a memory manufacturer but is also broadly positioned as a smartphone producer and technology group.

International Context

In Japan, SK Hynix had specialized early on in the development of so-called HBM chips (High Bandwidth Memory). The technology group, headquartered in the South Korean city of Icheon, benefits from having specialized early on in the development of so-called HBM chips (High Bandwidth Memory). SK Hynix has long been regarded as the most important supplier of HBM chips for the US market leader Nvidia.

Samsung's chip division is benefiting particularly from the sharply increased demand for semiconductors in the course of the AI boom. The South Korean electronics manufacturer Samsung is thus one of the biggest beneficiaries of the global AI expansion and is once again reporting a massive profit increase.

As reported, among others, by Reuters, the quarterly figures now presented are to be understood as a preliminary estimate. The group will only publish more precise figures at a later date, presumably at the end of the month. (APA, 7.7.2026).