Samsung Electronics Reports Record Q2 Operating Profit of 89.4 Trillion Won

Samsung Electronics achieved a record operating profit of 89.4 trillion won ($67.5 billion) and revenue of 171 trillion won ($130.5 billion) in the second quarter of this year, marking the third consecutive quarter of record results. Despite a performance bonus provision nearing 20 trillion won, the company reported more than double the operating profit of last year’s annual total in just one quarter. The expansion of investments in artificial intelligence (AI) has led to a supercycle in memory semiconductors, resulting in unprecedented performance among global tech giants.

On July 7, Samsung Electronics announced that its consolidated operating profit for the second quarter was 89.4 trillion won, a staggering 1,810.3% increase compared to the same period last year. Revenue rose by 129.3% to 171 trillion won. The operating profit exceeded market expectations of 84.16 trillion won by 6.2%.

Since the fourth quarter of last year, Samsung has set new records for both revenue and operating profit for three consecutive quarters. Notably, the second quarter operating profit surpassed last year’s total annual operating profit of 43.6 trillion won. The combined operating profit from 2021 to 2023 is estimated to be over 82.87 trillion won.

When compared to other global tech giants, Samsung's results are remarkable. Nvidia and Apple reported their highest quarterly operating profits at approximately $53.5 billion (about 82 trillion won) and $50.9 billion (about 78 trillion won), respectively. Samsung's operating profit for this quarter alone exceeded these previous records.

Additionally, this performance includes one-time costs such as a large performance bonus provision in the Device Solutions (DS) division. In May, the DS division's labor and management agreed to introduce a special management performance bonus linked to operating profit. The related provisions, estimated to be close to 20 trillion won, suggest that the second quarter operating profit could exceed 110 trillion won when excluding these costs.

The surge in performance was driven by memory semiconductors. Continued global investment in AI infrastructure has intensified supply shortages, particularly for high-bandwidth memory (HBM) and enterprise solid-state drives (eSSD). The demand for AI has also spread to general DRAM and NAND flash, leading to a sharp increase in memory prices. Industry estimates suggest that the DS division alone generated around 80 trillion won in operating profit.

Samsung's substantial memory production capacity has also provided a competitive advantage in a supplier-dominant market. Recently, the company became the first in the world to mass-produce the sixth-generation HBM, HBM4, while also increasing the share of high-value products. As Samsung continues to secure long-term supply contracts with global tech companies and expand production capacity, concerns about a semiconductor peak-out are beginning to ease.

In contrast, the Device Experience (DX) division, which handles finished products, has reported relatively weak performance due to cost pressures from rising prices of key components like semiconductors. Analysts estimate that the operating profit for the Mobile Experience (MX) and Network divisions ranges from 500 billion to 1 trillion won, while the TV (VD) and home appliances (DA) divisions are expected to generate less than 100 billion won. Operating profits for Samsung Display and Harman are estimated at around 500 billion won and between 200 billion to 300 billion won, respectively.

Looking ahead to the second half of the year, the expansion of HBM4 supply and improvements in foundry process yields may lead to further increases in performance. Recent market forecasts for Samsung's annual operating profit have risen from 366 trillion won to 374 trillion won over the past month.