Samsung Electronics expects to post an 18-fold jump in quarterly operating profit — from roughly 4.7 trillion won a year ago to 89 trillion won (£44bn; $58bn) for the April-June quarter — driven entirely by the global scramble for AI memory chips. It’s the company’s third consecutive record quarter, and the clearest signal yet that the AI infrastructure build-out has become a licence to print money for anyone holding HBM inventory.
🔍 THE BOTTOM LINE
The AI chip story has moved from speculative mania to confirmed earnings. Samsung’s 89 trillion won quarter means memory manufacturers are now the toll collectors on every AI workload on Earth — and the market knows it. Samsung’s stock has more than doubled since January; rival SK Hynix is up over 200%. The question isn’t whether the boom is real. It’s whether the next quarter can top it.
What the Numbers Say
Samsung’s preliminary earnings forecast, released ahead of full results later in July, projects operating profit of approximately 89 trillion won for Q2 2026. That’s a 1,800% increase year-on-year, driven by demand for high-bandwidth memory (HBM) chips that go into Nvidia’s GPUs, Google’s TPUs, and every major AI training and inference cluster on the planet.
The Financial Times reports that high memory chip prices fuelled the April-to-June earnings beat. Samsung is one of the world’s biggest semiconductor manufacturers, making chips for firms like Nvidia and Google. Bloomberg confirmed that the quarterly profit surged 19-fold, “just surpassing elevated expectations due to relentless demand for memory chips needed in AI data centers.”
The demand-supply gap is doing the work. Semiconductor demand continues to outstrip supply, pushing chip prices higher. Each new AI model launch — from GPT-5.5 to Claude Opus 4.7 to GLM 5.2 — requires more memory per accelerator than the last generation. Samsung sits at the chokepoint.
Three Record Quarters and Counting
This isn’t a one-quarter spike. Samsung has now posted three consecutive record quarters. The trajectory:
- Q4 2025: First record, driven by HBM3E volume
- Q1 2026: Second record, as AI inference demand added to training demand
- Q2 2026: Third record, with 89 trillion won — and counting
The compounding is structural. Every new data centre that hyperscalers build — Microsoft, Google, Meta, Amazon, xAI — needs thousands of HBM stacks. Samsung and SK Hynix are the only two companies producing HBM3E at scale. That duopoly is a pricing power that few industries have ever seen.
Why the Shares Didn’t Move
Here’s the wrinkle: despite the blowout forecast, Samsung’s shares barely budged. Bloomberg notes the stock has already more than doubled since January, and SK Hynix has jumped over 200%. The market priced in the AI chip boom months ago. When a 1,800% profit jump is merely “in line with expectations,” you know the rally is mature.
This is the AI trade’s central tension. The earnings are real, the cash is flowing, and the supply-demand gap shows no sign of closing. But the stocks have already run so far that beating expectations by a hair isn’t enough to move the needle. The market is now pricing in perfection — and perfection has a ceiling.
The Kiwi Angle
New Zealand has no domestic semiconductor manufacturing, but the AI chip boom reaches the country through three channels. First, infrastructure: every NZ-based AI startup running inference on cloud GPUs is paying prices partly set by Samsung and SK Hynix’s duopoly. The inference cost wars are the counter-pressure — open-weights models on cheaper hardware threaten to erode the margins that make Samsung’s quarter possible.
Second, investment exposure. NZ Super Fund and major KiwiSaver providers hold positions in global tech ETFs that include Samsung and SK Hynix. A 200% stock run in a holding is a real gain for retirement balances.
Third, the South Korean chip boom’s social cost is a cautionary tale. SK Hynix paid workers 3,000% bonuses while a million small businesses closed. The wealth gap hit a six-year high. For NZ, which is actively debating its own AI strategy, the Korean experience is a reminder that AI-driven growth concentrates wealth faster than it distributes it.
What Could Break the Streak
Three risks loom for Samsung’s next quarter:
1. HBM oversupply. Samsung and SK Hynix are both ramping capacity. Micron is entering HBM3E production. If supply catches demand in late 2026, pricing power collapses. The duopoly becomes a trio, and margins compress.
2. The open-weights threat. GLM 5.2 runs on AMD hardware at half the cost of Nvidia Blackwell. If open-weights models shift inference workloads to cheaper, non-HBM platforms, the demand curve for premium memory bends. It’s not a 2026 risk, but it’s a 2027 risk.
3. Geopolitical disruption. Samsung’s foundry partnership with Anthropic for custom 2nm AI chips signals the company is moving up the value chain. But US export controls, Korean industrial policy, and Taiwan’s TSMC dominance create a geopolitical fault line that one trade war could fracture.
❓ FAQ
Is Samsung’s profit sustainable? For now, yes — three record quarters with no supply-demand rebalancing in sight. But the stock has already doubled, meaning the market expects the streak to continue. Any quarter that merely “meets” expectations could trigger a sell-off.
What does this mean for NZ tech companies? Higher memory prices mean higher cloud GPU costs, which flow through to every AI-dependent NZ startup. The open-weights movement (GLM 5.2, DeepSeek) is the hedge — cheaper inference on cheaper hardware, if companies are willing to migrate.
Why didn’t the stock jump on the news? Because a 1,800% profit increase was already the consensus expectation. When the market prices in a 19-fold jump and you deliver a 19-fold jump, there’s no surprise left. The rally happened from January to June — the earnings report just confirmed it.
Could Samsung overtake TSMC? Not in foundry. TSMC still dominates advanced node manufacturing. But Samsung’s HBM memory business is a separate profit engine that TSMC can’t touch. The two companies don’t directly compete in the AI memory stack.
🔍 THE BOTTOM LINE
Samsung’s 89 trillion won quarter is the AI boom made tangible — real cash, real earnings, real supply constraints. But the stock’s flat reaction tells you the market has already consumed this story. The next chapter isn’t “AI chips are profitable.” It’s “what happens when everyone has enough chips.” That’s the quarter to watch.
