Samsung Electronics announced its Q2 2026 financial results on July 30. Benefiting from the surge in both volume and price of AI storage chips, the company's total revenue reached 171.5 trillion South Korean won (about 805 billion Chinese yuan), a 130% year-on-year increase, setting a new record for a single quarter; operating profit soared to 89.5 trillion South Korean won (about 420.1 billion Chinese yuan), surging by 1813.8% year-on-year. Driven by the global AI boom, Samsung's sales and operating profit have set records for three consecutive quarters.
Semiconductors contributed more than 99% of the profits, with HBM as the absolute engine
Looking at the business segments, Samsung's semiconductor division reported sales of 127.5 trillion South Korean won and operating profit of 89.2 trillion South Korean won, driving almost all of the company's earnings. The share of server storage chips in revenue reached a new high, with large-scale shipments of high-performance HBM4 and the start of delivery of HBM4E samples. Samsung expects continued increased capital spending on AI infrastructure and widespread adoption of intelligent agents in the second half of the year, leading to further growth in demand for server DRAM, enterprise SSDs, and HBM.
However, outside of semiconductors, the situation is different. The mobile phone business generated a total revenue of 33.2 trillion South Korean won but recorded an operating loss of 70 billion South Korean won. Although flagship phones drove revenue, component costs remained tight. The TV and white goods business generated a total revenue of 14.5 trillion South Korean won, also recording a small loss. The profit contribution rate from the semiconductor department has exceeded 99%, transforming Samsung's profit structure into a "single-engine" model.
Profit surged but market value dropped by 40%, with a 'buy the expectation, sell the fact' scenario unfolding
Despite the impressive financial figures, Samsung's stock price has fallen by 40% from its peak on June 1, with the current market value around 1327 trillion South Korean won. This month alone, the South Korean KOSPI index has declined nearly 29%, surpassing the record set during the 1997 Asian financial crisis. The South Korean Ministry of Finance has urgently increased restrictions on leveraged products.
According to researcher Quan Xiaoxing from the University of International Business and Economics, the performance boom driven by AI had already been fully anticipated by the market, representing a typical "buy the expectation, sell the fact" scenario. Deeper concerns lie in investors' anxiety about whether the capital expenditure cycle for AI chips is nearing its peak, which could trigger a reversal in the semiconductor industry cycle. Additionally, the ongoing losses in non-core businesses such as mobile phones and home appliances have raised questions about the company's long-term health. Furthermore, previous strike agreements mainly benefited high-profit departments such as memory chips, with a near 100-fold difference in bonuses within the same company, exposing deep-seated governance issues.
