Samsung's Q2 2026 profit surges 1,299.9% to a record high

Original author: Zhao Ying

Source: Wall Street Journal

Samsung Electronics recorded its most profitable quarter in history in the second quarter of 2026.

Specifically:

• Revenue reached 17.15 trillion KRW, representing a 130% year-over-year increase and a 28% sequential growth;
• Operating profit surged to 89.49 trillion KRW, a massive 1813.8% year-over-year increase from 4.68 trillion KRW in the same period last year, and a 56.4% sequential increase; the operating profit margin reached a high of 52.2%, up 1814% year-over-year.
• Net profit reached 71.62 trillion KRW, exceeding the estimated 68.36 trillion KRW, surging 1299.9% year-over-year, with a net profit margin of 41.8%.
• Earnings per share increased to 10,849 KRW, a dramatic rise from 737 KRW a year ago, and an increase of 3,726 KRW from the previous period.
• For the first half of the year, combined revenue for the first two quarters reached 30.537 trillion Korean won, with an operating profit of 14.673 trillion Korean won, representing year-over-year increases of 98.7% and 1,191.5%, respectively.

The core driver behind this performance surge is undoubtedly the semiconductor business. Centered on demand for AI servers, Samsung’s memory division achieved sales of 16.8 trillion KRW, setting a new all-time high, while its DS (Device Solutions) segment alone recorded an operating profit of 8.92 trillion KRW for the quarter, accounting for over 99% of the company’s total operating profit. Meanwhile, R&D investment rose simultaneously to 1.6 trillion KRW, a 41% quarter-over-quarter increase, demonstrating Samsung’s continued commitment to maintaining its technological leadership.

However, the divergence in performance structure is equally clear. The DX (Device Experience) segment—which includes smartphones, TVs, and home appliances—recorded an operating loss of -0.8 trillion won, as rising component costs eroded profit margins in the consumer business. The overall strong performance relies heavily on the rapid growth of the semiconductor segment alone.

After the announcement, Samsung's stock rose as much as 4.1% during trading in Seoul on Thursday, but later turned negative by 1.9% and is currently up 7.91%.

The memory business was the standout highlight of this quarter.

The DS division's sales rose from KRW 81.7 trillion last quarter to KRW 127.5 trillion, a 56% sequential increase; operating profit increased from KRW 53.7 trillion to KRW 89.2 trillion, more than 250 times year-over-year and 66% sequentially. Both DRAM and NAND achieved record-high shipment volumes, and server revenue accounted for a new record share.

In the area of HBM (High Bandwidth Memory), Samsung has completed mass production of HBM4 and begun bulk shipments to major customers, while also delivering the industry’s first HBM4E samples—positioning Samsung at the forefront of competition in the next-generation AI accelerator platform. Continued ramp-up of high-value-added products such as DDR5 and SOCAMM2, combined with strong demand for enterprise SSDs, has kept the overall memory market in a supply-constrained state.

Samsung's semiconductor division significantly exceeded expectations, driven primarily by explosive demand for high-bandwidth memory from AI servers. Mr. Huang, Research Director at Counterpoint, stated that Samsung's DRAM business is continuously expanding its market share lead: "Samsung is leveraging its strong position in memory to actively grow market share across most of its business segments."

Looking ahead to the second half of the year, Samsung expects AI infrastructure capital expenditures to remain strong, with the widespread adoption of Agentic AI further driving demand for server DRAM and enterprise SSDs. Although demand in the mobile and PC segments may experience temporary softening, Samsung anticipates the overall market will continue to face supply constraints and plans to maintain its technological leadership through continued focus on HBM4, Gen6, and UFS 5.0.

The System LSI (S.LSI) division achieved a record first-half revenue this quarter, driven by strong sales of SoCs and image sensors. The company has successfully secured orders for the next-generation flagship SoC and new custom SoC design contracts, continuing to expand its market share in the high-end mobile segment. Future priorities include driving sales of the next-generation flagship SoC, expanding new custom SoC business, and entering additional high-value areas, including diversified image sensor applications and Power IC business.

The foundry business also shows positive momentum: demand for HBM B-Die drives revenue growth, orders from U.S. customers remain strong, and design contracts for 2nm HPC projects continue to progress. In the second half of the year, Samsung plans to ramp up mass production of 2nm Gen 2 mobile chips, increase volume for 4nm LPU, and expand Base-Die shipments, targeting double-digit revenue growth and driving medium- to long-term growth through advanced nodes and wins in AI/HPC designs.

In stark contrast to the semiconductor division's success, the DX department recorded an operating loss of -0.8 trillion Korean won this quarter.

In the mobile business (MX/NW), smartphone revenue reached KRW 3.23 trillion, a 14% year-over-year increase, with steady sales of both flagship and A-series devices, and the launch of the Galaxy Z Fold8 series contributing new growth momentum. However, operating profit turned negative at -KRW 700 billion, primarily due to industry-wide increases in component costs. The company is actively advancing efficiency optimization initiatives and plans to expand its AI experience ecosystem through new form factors such as smart glasses.

The VD/DA (Visual Display and Home Appliance) segment generated revenue of 1.45 trillion KRW, with a slight year-over-year increase, but operating profit neared breakeven (-0.01 trillion KRW). Demand for air conditioners drove DA segment revenue, yet cost pressures continued to weigh on performance. In the second half of the year, Samsung plans to enhance overall profitability by differentiating with "Vision AI," alongside expanding TV Plus content and advertising services.

Samsung Display (SDC) showed clear marginal improvement this quarter. Revenue reached KRW 7.5 trillion, up 17% year-over-year; operating profit rose from KRW 0.4 trillion last quarter to KRW 0.7 trillion.

Strong demand for OLED panels in high-end smartphones is the primary driver, while the expansion of the gaming monitor market is also boosting the large-size panel business. In the second half of the year, Samsung plans to initiate timely mass production of its 8.6G IT OLED line and further expand its differentiated product offerings to the tablet, gaming, and automotive markets.

VD/DA sales reached KRW 1.45 trillion, up 2% quarter-over-quarter and 3% year-over-year; operating profit was -KRW 0.01 trillion. VD’s quarterly profitability declined due to higher costs, but revenue and profit grew year-over-year driven by demand from sporting events. DA’s revenue increased due to strong air conditioner demand, but cost pressures weighed on profitability. In the second half, VD will lead the AI TV market with “Vision AI,” and enhance profitability through TV Plus content diversification and advertising business expansion; DA will expand AI product sales and strengthen channel diversification and product competitiveness.

Harman (the premium audio and automotive solutions brand acquired) recorded revenue of 4.6 trillion KRW, a 19% year-over-year increase, and returned to an operating profit of 0.4 trillion KRW. Strong sales of automotive central computing units and portable audio products drove improved overall performance, and the company will continue to focus on sustaining steady growth in high-growth automotive segments and brand-driven audio businesses.

Samsung Electronics' financial position has significantly improved following a surge in performance. As of the end of June 2026, total assets reached 759.5 trillion Korean won, an increase of over 12 trillion won from three months prior; cash and cash equivalents reached 190 trillion won, with a net cash position of 167.6 trillion won—nearly double the 86.7 trillion won recorded a year earlier.

Operating cash flow for the quarter reached a record-high KRW 105.1 trillion, with net profit contributing more to cash flow than depreciation and amortization. ROE surged from 5% a year ago to 56%, and the EBITDA profit margin reached 59%.

In terms of investment, capital expenditures for the quarter amounted to KRW 14.1 trillion, while Samsung also spent KRW 5.6 trillion on share repurchases and KRW 6.2 trillion on dividends, demonstrating continued focus on shareholder returns supported by strong profitability. The debt-to-equity ratio remained low at 31%, with a net debt-to-equity ratio of -29%, reflecting a solid financial structure.