Samsung Electronics (SSNLF), the South Korean technology giant spanning memory chips, consumer electronics, displays and logic chips, reported a sharp profit surge that still appeared to fall short of what investors had priced into the stock. The company said preliminary operating income for the June quarter reached 89.4 trillion won, or about $58 billion, representing a 19-fold increase from a year earlier and beating projections by about 6%. Revenue more than doubled to 171 trillion won, reinforcing the scale of AI-driven demand across the memory-chip market. However, Samsung Electronics shares fell more than 10% in Seoul after a near-150% rally this year, weighing heavily on the Kospi and briefly triggering a trading halt as investors appeared to take profits following one of the strongest AI-linked runs in the market.
The results suggest memory demand remains strong as AI infrastructure spending continues to absorb supply. Samsung, the world's largest memory maker, is benefiting from a shortage in memory chips that has become a key bottleneck for AI development, while manufacturers have been prioritizing higher-end memory products for data-center customers. HSBC estimated DRAM selling prices rose more than 40% in the April-June quarter from the prior three months, while NAND prices increased more than 50%. Analysts expect memory shortages to last through at least 2027, which could give Samsung, SK Hynix (HXSCL), a South Korean chipmaker more focused on high-bandwidth memory for AI computing, and Micron Technology NASDAQ:MU, a U.S. memory-chip producer, significant pricing power. Samsung's overall operating margin reached 52% in the quarter, and Bloomberg Intelligence analyst Masahiro Wakasugi said the memory-chip business likely expanded to about 80%, similar to Micron's fiscal third-quarter figure.
Investors may view the selloff as a reminder that even record earnings can disappoint when expectations around AI are already elevated. Kioxia Holdings, a Japanese NAND flash memory company that competes with Samsung, fell 11% in Tokyo, while Tokyo Electron, a Japanese chip-equipment supplier, and Screen Holdings, another Japanese chip-gear supplier, also declined. ASML Holding NASDAQ:ASML, a Dutch semiconductor equipment supplier and Samsung supplier, dropped more than 4% in Europe as the pressure spread across AI-linked semiconductor trades. Samsung's shares have also lagged SK Hynix, which has gained roughly 250% this year, compared with Samsung's roughly 150% advance, as investors have favored companies with stronger exposure to AI-focused high-bandwidth memory. For 2026, Samsung has announced plans to spend more than $70 billion on production capacity expansion and research, while Samsung Group and SK Group plan to build four chipmaking plants in southwestern South Korea as part of an 800 trillion won push to expand capacity.