Samsung's AI Memory Surge Set to Deliver Another Record-Breaking Quarter
A prolonged shortage of memory chips driven by surging artificial intelligence demand is expected to push Samsung Electronics to another record quarter, reinforcing the extraordinary rally that has transformed the global memory industry over the past year.
While investors are focused on the strength of chip prices and AI spending, the timing of employee bonus costs could emerge as a key factor in how the market reacts to Samsung's latest earnings.
AI Demand Continues to Outrun Global Memory Supply
Samsung Electronics is expected to report operating profit of 86 trillion won ($56.35 billion) for the April to June quarter, according to an LSEG SmartEstimate based on forecasts from 30 analysts with strong forecasting track records.
If achieved, the figure would represent an almost 18-fold increase from 4.7 trillion won recorded a year earlier and mark Samsung's third consecutive quarter of record operating profit.
The gains reflect a sustained shortage in the global memory market, as demand for AI infrastructure continues to exceed production growth among major chipmakers.
Analysts expect supply constraints across the memory market to persist through at least next year, supported by continued investment in AI computing infrastructure worldwide.
Agentic AI Expands Demand Beyond High-End Memory Chips
The current boom extends beyond high-bandwidth memory (HBM), which powers advanced AI accelerators.
Demand for conventional DRAM and NAND memory products has also accelerated as newer AI applications require significantly greater memory and storage capacity.
Unlike earlier AI systems focused primarily on training large language models, agentic AI applications perform more complex, multi-step tasks, increasing demand for server memory and data storage during inference workloads.
Samsung remains a major supplier of memory chips to leading technology companies including Nvidia, Google and Apple, all of which continue to expand AI-related investments.
Memory Prices Continue Their Sharp Climb
The tightening supply environment has translated into substantial pricing gains across the industry.
According to Citi Research, average selling prices for DRAM rose 44 per cent quarter-on-quarter during the second quarter, while NAND prices increased by 53 per cent.
The rally has driven extraordinary gains in memory chipmakers' shares this year.
Samsung Electronics shares have climbed 158 per cent, while those of SK Hynix and Micron have surged 273 per cent and 242 per cent respectively, lifting all three companies to market valuations exceeding $1 trillion.
Analysts believe the recent share price gains are increasingly being supported by earnings growth rather than speculative enthusiasm, as stronger memory pricing continues to boost profitability across the sector.
Will Employee Bonus Costs Cloud Record Earnings?
Despite favourable market conditions, analysts caution that Samsung's reported earnings could still miss expectations if the company records larger-than-anticipated employee bonus provisions during the quarter.
Samsung reached a wage agreement with workers in late May, avoiding a potential large-scale strike by allocating 10.5 per cent of the semiconductor division's operating profit to special employee bonuses.
Some analysts estimate cumulative bonus provisions could exceed 40 trillion won.
As a result, the timing of accounting recognition for those payments may significantly influence Samsung's reported second-quarter earnings, even if the company's underlying operating performance remains strong.
Samsung is expected to release its detailed earnings report later this month.
Can AI Spending Sustain The Memory Boom?
While memory supply and demand fundamentals remain favourable, analysts increasingly view the sustainability of AI infrastructure spending as the industry's biggest long-term risk.
According to JPMorgan, investors generally agree that memory markets remain tight, but concerns are growing over whether AI memory's expanding share of cloud providers' capital expenditure can continue rising indefinitely.
AI memory spending is estimated to account for 52 per cent of cloud infrastructure investment this year and is expected to exceed 70 per cent next year.
Any slowdown in AI spending could have major implications for memory manufacturers, particularly as Samsung and SK Hynix recently committed to investing a combined 3,200 trillion won in expanding semiconductor production capacity in South Korea.
Samsung plans to deploy its investment between 2026 and 2040, while SK Hynix has yet to provide a detailed timetable.
Investors are now looking for clearer evidence that advances in AI services will generate stronger cloud computing revenues and broader commercial returns capable of supporting continued investment growth.
Rising Memory Prices Create Pressure Beyond The Chip Industry
The effects of the memory shortage are increasingly spreading beyond semiconductor manufacturers themselves.
Nomura expects commodity DRAM prices to rise by a further 24 per cent in the July to September quarter, while NAND prices are forecast to increase by 25 per cent.
For Samsung, rising memory prices have created an unusual challenge within its own business portfolio.
Higher component costs have begun eroding margins in its smartphone division, outweighing recent handset price increases.
Although Samsung has already increased smartphone prices, analysts believe additional price rises may be necessary during the second half of the year.
Rival Apple has already raised prices for certain iPad and MacBook models in recent months, highlighting the broader impact of the AI-driven memory shortage across the technology sector.
Anais
Weatherly