Samsung's Q2 profit is expected to exceed 40 years of cumulative earnings.

Author: Claude, Shenchao TechFlow

DeepInsight Summary: If you hold assets related to memory, AI hardware, or the semiconductor supply chain, pay close attention to Samsung Electronics' Q2 guidance on July 7. Market consensus expects its quarterly operating profit to reach approximately 85.5 trillion Korean won (about $55.9 billion), a surge of roughly 18 times year-over-year—exceeding Apple and NVIDIA’s同期 figures and setting a new all-time quarterly record for any tech company globally. DRAM and NAND contract prices jumped 40% to 65% in a single quarter, and Samsung is demanding a further 20% increase in DRAM prices for Q3. This surge, driven by AI-related memory shortages, is elevating memory manufacturers’ pricing power to levels unseen in a decade.

Samsung Electronics will disclose its Q2 2026 earnings preview on July 7, which is likely to set a new record.

According to consensus estimates compiled by financial data provider FnGuide, Samsung's second-quarter revenue is expected to be approximately KRW 169.4 trillion (about $110.7 billion), with an operating profit of approximately KRW 85.5 trillion (about $55.9 billion). This profit represents a roughly 18-fold increase compared to KRW 4.7 trillion in the same period last year and a sequential increase of about 49.5% from KRW 57.2 trillion in the first quarter, marking the highest quarterly operating profit in the company’s history and surpassing the quarterly operating profits of Apple and NVIDIA during the same period.

Looking over the longer term, Samsung’s full-year profitability this year is even more remarkable. Multiple investment banks predict that Samsung’s full-year operating profit in 2026 will exceed 100 trillion Korean won—more than double the 43.6 trillion won recorded in 2025. Samsung’s first-quarter profit of 57.2 trillion won alone has already surpassed last year’s full-year total. For investors monitoring the semiconductor cycle, the slope of this upward trend has never been seen in either of the previous two memory supercycles.

Samsung's profit structure has undergone a fundamental shift in this cycle.

Of the 57.2 trillion KRW in operating profit for the first quarter, the DS division, responsible for chip business, contributed 53.7 trillion KRW, accounting for approximately 94% and representing a year-over-year increase of about 48 times. The operating margin for the chip business exceeded 70%, surpassing the margins of NVIDIA and TSMC during the same period. In contrast, profits from the mobile and appliance businesses declined by nearly 40% year-over-year, becoming almost negligible.

The driving force stems from shortages and price increases in AI memory. Large tech companies are continuously expanding their AI data centers, diverting massive amounts of memory away from consumer markets such as smartphones, PCs, and gaming consoles, pushing supply to its limits. During the first-quarter earnings call, Kim Jae-jun, head of Samsung’s memory business, stated that the company’s demand fulfillment rate has fallen to a historic low, with concerned customers placing advance orders to secure capacity as early as 2027. As a result, prices surged, with first-quarter contracted DRAM prices rising approximately 50% quarter-over-quarter.

For holders, it’s important to note that this price surge is a double-edged sword for Samsung. Samsung is both the biggest beneficiary of upstream price increases and one of the biggest victims of rising downstream costs. The same price hike appears as profit on the chip division’s books and as a loss on the mobile division’s books. Samsung’s mobile business has already issued an internal warning that it may face its first annual loss in the division’s history by 2026, with core component costs now accounting for over 40% of total device costs.

The consensus estimate of 8.55 trillion won is not a ceiling; the main discrepancy among brokerage firms lies in the accrual of employee bonuses.

Last month, Samsung’s management and labor union reached an agreement to establish a special performance bonus for the semiconductor (DS) division, calculated at 10.5% of the division’s operating profit, with an estimated total accrual between KRW 19 trillion and KRW 25 trillion for the first half of the year. This accrual directly reduced reported profits. Korea Investment & Securities accordingly lowered its operating profit forecast from KRW 95.85 trillion to KRW 86.05 trillion, while Shinhan Investment reduced its estimate from KRW 89.86 trillion to KRW 82.1 trillion.

Shinhan investment analyst Kim Hyung-tae noted that, excluding the impact of bonus provisions, Samsung’s actual profitability is estimated to have surpassed the 100 trillion won threshold. This means that Samsung’s true earning capacity in the second quarter was higher than the reported figure of 85 trillion won, as bonus provisions transferred a portion of profits to employees. For investors tracking Samsung’s fundamentals, it is essential to distinguish between reported earnings and operating profit adjusted for provisions when reviewing the seven-day forecast, as the two figures may differ by trillions of won.

The upward momentum for memory prices has not yet peaked, which determines Samsung's profit elasticity over the next two quarters.

DRAM and NAND flash contract prices surged 40% to 65% quarter-over-quarter in the second quarter, and Samsung is already seeking an additional 20% increase for third-quarter DRAM contracts. Consumer electronics manufacturers are resisting this round of price hikes, but persistent supply constraints mean the upper hand remains with memory manufacturers like Samsung. Micron in the U.S. has already validated the industry’s profitability strength, reporting an operating profit of $33.32 billion (approximately 51 trillion Korean won) for its fiscal quarter ending in May, a year-over-year increase of about 15.4 times.

Samsung believes this shortage will persist until 2027 or longer. As production capacity increasingly shifts toward AI infrastructure projects, consumer electronics may be the most affected segment. For those looking to invest in the semiconductor supply chain, the ongoing price increase cycle remains a key support factor—but it’s important to recognize that prices are already at historical highs, and a significant correction could occur if investment in AI data centers slows down.

Record profits, but stock prices are falling—this divergence itself is the most important signal to understand right now.

Despite second-quarter profit expectations far surpassing those of Apple and NVIDIA, Samsung's stock has moved in the opposite direction over the past week. As of the close last Friday, it stood at 309,500 KRW, falling 4.18% over the week and declining approximately 17.36% from its 52-week high of 374,500 KRW set on June 19. In early July, weakening U.S. semiconductor indicators triggered global selling pressure, causing the Korean Composite Stock Price Index to drop nearly 8% in a single day, dragging Samsung and SK Hynix into a deep correction.

Two catalysts are supporting the stock price rebound. First, reports suggest that AI company Anthropic is in talks with Samsung to develop custom hardware, adding a new narrative beyond memory to Samsung’s chip manufacturing capabilities. Second, upward pricing momentum in the memory market continues. Current market hesitation stems largely from concerns about a cyclical peak, as investors wait to see whether this record-breaking performance can alleviate peak anxiety and serve as a turning point for sentiment recovery. SK Hynix’s American Depositary Receipts (ADRs) are set to list on Nasdaq on July 10, with an offering size of approximately KRW 45.5 trillion—another key event this week that will influence sentiment across the sector.

For readers holding semiconductor assets, the 7-day and 10-day milestones are worth watching. If Samsung’s actual results confirm that profitability is still on an upward trajectory and its Q3 guidance remains strong, the current stock price correction is likely a mid-cycle adjustment rather than a top signal. Conversely, if the positive news is fully priced in after the earnings release and the stock continues to weaken, it may indicate that the market is already pricing in the peak of this memory supercycle.