Samsung Electronics has set new records for both sales and operating profit in the second quarter. Following the announcement of an operating profit of over 57 trillion won in the first quarter, expectations for an annual operating profit of 300 trillion won and a global ranking of second place have intensified.
On July 7, Samsung Electronics disclosed its preliminary results for the second quarter, reporting sales of 171 trillion won and an operating profit of 89.4 trillion won. Compared to the previous quarter, sales increased by 27.74%, and operating profit rose by 56.21%. Year-on-year, sales surged by 129.31%, while operating profit skyrocketed by 1810.26%.
Both sales and operating profit are the highest ever recorded for a single quarter. Samsung had previously reported sales of 133 trillion won and an operating profit of 57.2 trillion won in the first quarter, but it surpassed those figures in just one quarter. The operating profit alone exceeds last year's total annual operating profit of 43.6 trillion won by more than double.
This performance has alleviated concerns raised by some analysts about a potential peak-out in the semiconductor boom. The market attributes Samsung's robust profit strength to ongoing supply shortages in memory products, including DRAM, NAND, and HBM, driven by increased investments in AI data centers.
Industry analysts suggest that if there had been no provisions for performance bonuses, the actual profit strength could have exceeded 100 trillion won. It is estimated that Samsung set aside about 17 trillion won in provisions for special management performance bonuses in the second quarter. Excluding this, the operating profit would be around 106 trillion won.
Attention now turns to whether Samsung can achieve the world's highest annual operating profit by the end of the year.
When the first quarter results were announced, forecasts for Samsung's annual operating profit had already risen to around 300 trillion won. At that time, the average forecast from five domestic securities firms was 304 trillion won, with Citigroup projecting 310 trillion won. According to KB Securities and Bloomberg, there are expectations that Samsung could rank second globally in operating profit, following NVIDIA.
Bloomberg previously reported consensus figures for comparison, including Saudi Aramco at 294 trillion won, Microsoft at 245 trillion won, Alphabet at 241 trillion won, Apple at 223 trillion won, and Amazon at 150 trillion won. If Samsung achieves an operating profit in the 300 trillion won range, it would surpass the state-owned oil company Aramco and become the second most profitable company in the world after NVIDIA.
Importantly, following the preliminary results for the second quarter, expectations have risen even higher. According to reports, global investment bank Citigroup has raised its forecast for Samsung's annual operating profit to 401 trillion won. While not all global companies have updated their forecasts at this time, simply applying the earlier Bloomberg estimates suggests that Samsung could potentially surpass NVIDIA to become the world's top company in operating profit.
The key driver behind this performance is the semiconductor sector. Demand for AI servers has pushed up prices for not only HBM but also general-purpose DRAM and NAND. The market indicates that prices for DRAM and NAND rose significantly in the second quarter compared to the previous quarter, and Samsung, possessing the largest production capacity among the three major memory manufacturers, has benefited the most from the supply shortages.
However, uncertainties remain. If investments in AI infrastructure are delayed or if issues related to data center power and location arise, forecasts for memory demand may need to be adjusted. Provisions for performance bonuses could also impact reported operating profits in future quarters.
A business industry source stated, "Samsung's second-quarter results demonstrate that the semiconductor boom is not at its end but is still ongoing. With annual operating profits projected to exceed 300 trillion won and even reach 400 trillion won, Samsung has entered a phase where it is compared not just to domestic manufacturers but to the world's top profit-generating companies."
* This article has been translated by AI.
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