Samsung profit up by 1,300% despite losses in mobile business
Global chip shortage is a double-edged sword for the South Korean giant.
Samsung Galaxy Z Flip 8 smartphone. Chris Ratcliffe/Bloomberg via Getty Images
- Samsung’s profit rose nearly 1,300% as AI-driven chip demand and shortages lifted memory prices.
- Its mobile division posted a KRW 700 billion ($487 million) loss, pressured by higher chip costs.
- Samsung expects server demand and AI infrastructure spending to keep the chip market undersupplied.
- Executives warned shortages could worsen in 2027 and continue into 2028, supporting long-term data center deals.
Key Takeaways by nexos.ai, reviewed by Cybernews staff.
Samsung Electronics has increased its profit by almost 1,300%, riding the AI-fueled wave of global chip demand and shortages. However, the results were hampered by the first quarterly loss in the company's mobile division, which is struggling with surging chip prices.
In the second quarter of this year, the company registered a record net profit of KRW 71.6 trillion ($43 billion), while its mobile division posted a KRW 700 billion loss ($487 million), which is still relatively small compared to the total profit.
In its announcement, the company said that it managed to achieve record-breaking results "by proactively addressing AI demand despite limited capacity with a primary focus on server products," while rising prices have also contributed.
Samsung Electronics said it expects robust demand, centered on servers, driven by continued AI infrastructure capex and broader adoption of agentic AI, while overall demand growth is expected to keep the market undersupplied despite partial demand moderation in mobile and PCs. This might mean that prices will keep rising.
Josh Gilbert, an analyst at eToro, told Reuters that chips are enriching one side of Samsung's business, but they are also leaving the company "more exposed than ever to memory pricing and the durability of hyperscaler demand."
In either case, the company keeps strengthening its position in the mobile product line. Samsung said that, in H2 2026, it plans to ramp up production of new mobile products based on the second-generation 2nm process, which makes chips smaller, more energy-efficient, and faster.
Meanwhile, during an earnings call, the company's executives were more straightforward.
"The supply shortage in 2027 is expected to worsen compared to this year, and it is expected to continue in 2028," Jaejune Kim, executive vice president of Samsung's memory business, said.
Stay updated with our latest stories and follow us on social media
Be the first to discover new stories, ideas, and updates from our team.
He said the company has already secured 5 major deals with data center firms and is about to close 5 more, hoping that these long-term contracts will secure 60% to 70% of the company's total capacity over the longer term.
The market reaction was mixed, as the stock price erased all its strong gains today and ended the day almost 1% lower. The stock dropped 38% over the month, trimming its year-to-date gains to 61%.
