Samsung Electronics posted the most profitable quarter in its history, as runaway demand for the memory chips that power artificial intelligence systems overwhelmed weakness in its smartphone business.

The South Korean giant said second-quarter operating profit surged roughly 19-fold year-on-year — an increase of about 1,800% — while net profit soared nearly 1,300%, according to the company's earnings release. Its semiconductor division alone lifted operating profit more than 250-fold, reflecting how sharply the AI boom has revalued memory and logic chips. Samsung called the result a record and said it beat consensus analyst estimates. For more context on this story, see our ongoing latest AI developments.

The figures underscore a widening split inside the company: the chip business is booming while the mobile division posted a loss. Executives attributed the divergence to structural demand for high-bandwidth memory (HBM) and advanced logic used in AI accelerators, where Samsung and rival SK hynix are among the world's few qualified suppliers.

Investors cheered the report. Samsung's shares jumped around 8% in Seoul trading after the announcement, with analysts pointing to the breadth of AI-related orders and a tightening supply outlook.

That outlook is becoming a central concern for the broader industry. Samsung cautioned that the chip shortage now gripping the AI sector could extend to 2028, as the time needed to build new fabrication capacity struggles to keep pace with accelerating orders from cloud providers and model developers. Executives described supply as "tight" and said robust AI demand shows no sign of cooling.

The results arrive as South Korean chipmakers emerge as the principal beneficiaries of a global AI build-out that has strained supply chains across continents. Washington's "Pax Silica" alliance, which Seoul recently joined, is explicitly designed to secure the AI chip supply lines that Samsung and SK hynix anchor.

For Samsung, the message to markets was unambiguous: the AI cycle is far from peaking, and the capacity to make the chips that run it is now among the world's most strategic bottlenecks.

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