Samsung is on track for an 18-fold increase in profits due to a surge in demand for AI memory.

      Analysts project that Samsung Electronics will report an operating profit of approximately 86 trillion won, or roughly $56 billion, for the second quarter, marking a third consecutive record due to rising DRAM and NAND prices. This earnings comparison is one of the most unusual in the company's history. The expected profit is about 18 times greater than the 4.6 trillion won achieved in the same quarter last year, when the memory segment was still more of a burden than a benefit.

      This disparity is less about an immediate turnaround and more indicative of the progress made within the AI memory cycle since Samsung reached a market valuation of $1 trillion earlier this year. The figure is an estimate based on analyst predictions leading up to the guidance, and while preliminary earnings in Korea don’t typically stray far from expectations, the overarching trend appears clear.

      If the estimate holds true, it would mark Samsung’s third consecutive quarter of record operating profit, consistently driven by the increased prices of memory chips compared to the previous year. Price hikes are central to this narrative; Citi Research indicates DRAM contract prices rose around 44 percent quarter-over-quarter, while NAND flash prices surged roughly 53 percent, with similar findings reported by HSBC.

      These significant increases are not typical for the memory market, signaling a shift from cyclical trends to a structural shortage, as demand for AI technology continues to outpace supply from the three major memory manufacturers. This trend is echoed by Micron’s tripled revenue on the American side of the sector.

      A notable change in this cycle is its wide-ranging impact. High-bandwidth memory (HBM), which is stacked DRAM used alongside Nvidia’s accelerators, remains the most lucrative sector, and Samsung has been striving to catch up with SK Hynix in this area. However, the price increases are now affecting standard DRAM and conventional NAND as well, as AI workloads expand beyond training clusters into the broader server and storage infrastructure that enables large-scale inference.

      This situation also affects the supply chain considerably. Memory manufacturers have predominantly shifted existing capacity towards AI instead of expanding production, leading to shortages that are boosting Samsung’s profits while simultaneously limiting components available for smartphones and laptops. Apple experienced this effect firsthand when it discontinued the $599 Mac mini amid DRAM shortages. Samsung operates on both sides of this equation: selling limited memory while its own devices division incurs higher costs.

      Samsung provides memory to many of the major companies developing large AI systems, including Nvidia, Google, and Apple, placing it in a crucial position within the infrastructure supply chain, even if it does not hold the market leader status.

      Despite this advantageous position, the competitive landscape remains tense. SK Hynix has advanced more quickly with its latest HBM offerings, securing a multi-year supply agreement with Nvidia, and the two South Korean companies are now vying for the title of the nation’s most valuable firm.

      Additionally, the implications of such significant profits within Samsung are complex. The semiconductor division has been contributing a disproportionate share of the group's total profit, leading to contentious discussions over how these earnings should be distributed among employees. Record profits tend to intensify rather than resolve these disputes.

      The preliminary guidance expected later this week will provide initial profit and revenue figures, but the detailed divisional breakdown will be disclosed with the complete results later in the month. Until then, the estimate serves as a testament to the extent to which the memory business has evolved due to a singular demand cycle. An eighteen-fold increase in profit from last year does not indicate a recovery; it signifies a fundamentally different company operating in a transformed market.