Samsung Electronics delivered another record quarter with operating profit jumping 19-fold year over year to KRW 89.5 trillion, but the numbers reveal an extreme dependency on memory. The Device Solutions division accounted for 99.7 percent of total operating profit in the second quarter, with operating profit soaring more than 250-fold compared to a year ago.
The company posted record Q2 revenue of KRW 171.5 trillion, up 28 percent quarter over quarter, driven primarily by the DS division which saw sales rise 56 percent sequentially. The unit’s operating margin expanded to nearly 70 percent from 65.7 percent in Q1 2026.
However, the memory boom came with a sharp downside for Samsung’s smartphone business. Soaring memory prices drove up component costs, pushing the Mobile eXperience division to a KRW 700 billion operating loss, its first quarterly loss on record.
Samsung expects the memory supply crunch to intensify in the second half as AI server DRAM, enterprise SSDs, and HBM demand far outpaces weakening mobile and PC demand. The company forecasts the AI memory shortage will worsen next year, with the supply-demand imbalance persisting through 2028.
On HBM4, Samsung entered mass production and began shipments to major customers including NVIDIA. The company expects HBM4 revenue to more than triple quarter over quarter in Q3 and account for more than 60 percent of total HBM revenue in the second half. Meanwhile, Samsung’s foundry and System LSI units remained loss-making in Q2, though signs of improvement are emerging on rising HBM base-die demand and new 2nm HPC design wins.
