Samsung is set to experience an 18-fold increase in profits due to strong demand for AI memory.

      Analysts anticipate Samsung Electronics will announce an operating profit of approximately 86 trillion won for the second quarter, marking a third consecutive record as prices for DRAM and NAND increase. This places the technology giant on track for one of the most unusual earnings comparisons in its history. When it releases its preliminary guidance this week, expectations are that the operating profit will reach about 86 trillion won, nearly $56 billion. This figure represents around 18 times the 4.6 trillion won earned during the same quarter last year, a period when the memory sector was a burden rather than a driving force.

      The stark difference highlights not a sudden revival but rather the extent of the AI memory cycle's growth since Samsung surpassed $1 trillion in market value earlier this year. This estimate is derived from analyst forecasts ahead of the company's guidance, and while preliminary earnings in Korea usually align closely with expectations, the projected direction remains clear.

      If achieved, this would mark Samsung's third consecutive quarter of record operating profit, each attributed to memory chips being sold at significantly higher prices than a year prior. Price trends are pivotal; Citi Research reports a quarterly increase in DRAM contract prices of around 44%, with NAND flash prices rising approximately 53%, a conclusion echoed by HSBC.

      These shifts are not the usual incremental changes seen in the memory market; they indicate a shortage that appears to be structural rather than cyclical, as demand for AI infrastructure consistently exceeds the supply capabilities of the three major memory manufacturers. Micron's substantial revenue increase illustrates a similar trend within the American sector.

      A notable aspect of this cycle is its breadth. High-bandwidth memory, the stacked DRAM used alongside Nvidia's accelerators, remains the most lucrative segment, and Samsung has focused on closing the gap with SK Hynix in this area. However, the price surge is not limited to HBM; standard DRAM and conventional NAND prices are also rising as AI workloads expand from training clusters into traditional server and storage infrastructures for large-scale inference.

      This situation impacts much more than just data centers. Memory manufacturers have primarily adjusted their existing capacity towards AI rather than expanding production, which is causing shortages that are affecting the availability of parts for phones and laptops. Apple, for example, felt the impact directly when it had to withdraw the $599 Mac mini during the DRAM shortage. Samsung finds itself in a dual role, providing scarce memory while its own device division incurs higher costs.

      Samsung supplies memory to many companies developing large AI systems, including Nvidia, Google, and Apple, positioning it centrally within the supply chain, even if it doesn't lead the market. Nonetheless, competition remains intense; SK Hynix has rapidly advanced in the latest HBM offerings and has secured a multi-year supply agreement with Nvidia, resulting in the two Korean companies frequently exchanging the title of the country’s most valuable business.

      Additionally, this massive potential profit raises internal questions for Samsung. The semiconductor division has been the primary source of the group's profits, leading to significant debates about how to distribute the windfall among employees. Record earnings tend to intensify these discussions rather than resolve them.

      The preliminary guidance will reveal headline profit and revenue figures, but a detailed division breakdown will follow with the complete results later in the month. Until then, this estimate symbolizes how significantly the memory sector has transformed due to a singular demand cycle. Eighteen times last year's profit indicates not just a recovery but a fundamentally different company operating within a different market.