Samsung's chip division just did something that would have sounded absurd a year ago: it's on pace to earn more in 2026 alone than it earned across its entire 40-year history in the semiconductor business, combined.
The numbers behind the headline
Samsung posted preliminary operating profit of 89.4 trillion won, roughly $58.5 billion, for the second quarter of 2026, an increase of about 1,810 percent year-over-year from the 4.7 trillion won it earned in the same quarter last year. That figure overtakes Nvidia's most recently reported quarterly operating profit of $53.54 billion, making Samsung the most profitable technology company in the world for the quarter, at least until Nvidia reports its own Q2 results. Quarterly revenue hit a record 171 trillion won, roughly $123.4 billion.
The scale becomes clearer with context from inside the company itself. Kim Yong-Kwan, head of corporate management, strategy, and operations for Samsung's Device Solutions division, told staff at a company town hall that the semiconductor unit's full 2026 operating profit will exceed everything the division has earned across roughly 40 years in the chip business, dating back to Samsung's 1974 acquisition of Korea Semiconductor. SamMobile estimates the division's cumulative operating profit from 1985 through 2025 at under 300 trillion won, a figure Samsung's chip business alone could now match or exceed within this single calendar year.
What's actually driving this
The surge traces directly to the same global memory shortage that has pushed up prices on phones, laptops, and tablets throughout 2026. Samsung's Device Solutions division, which houses its memory chip business, generated 53.7 trillion won of the company's 57.2 trillion won total operating profit in the first quarter alone, roughly 94 percent of everything Samsung earned that quarter. The growth is concentrated specifically in high-bandwidth memory, server DRAM, and NAND flash, all products that have become critical infrastructure for AI data centres. Demand for that memory has outpaced supply badly enough that prices have risen sharply over the past year, and Samsung, as one of the world's three largest memory chip manufacturers, is capturing an outsized share of that pricing power.
This year's profit will exceed the cumulative profit generated over the past 40 years since we entered the semiconductor business.
A shift in where AI's profits actually land
For most of the current AI boom, the dominant narrative has centered on chip designers like Nvidia capturing the bulk of the financial upside from AI infrastructure spending. Samsung's results complicate that story. They suggest the memory and storage layer underneath AI accelerators, unglamorous, commodity-adjacent hardware that rarely gets the same attention as GPUs, is now generating comparable or greater profit than the processors themselves. That's a meaningful structural shift: AI's economic winners aren't limited to companies building the chips that run models, they extend deeply into the supply chain feeding those chips the memory bandwidth they depend on.
Despite the record results, Samsung's shares actually fell 7 percent following the announcement, reflecting investor concern about how sustainable this level of profitability actually is, given how directly it depends on a supply-demand imbalance that could ease as memory manufacturers globally expand capacity in response.
The uncomfortable flip side of this story
Samsung's windfall is quite literally the same shortage that has driven Apple to raise prices across Macs and iPads, pushed Samsung's own Galaxy Tab and foldable pricing upward, and forced console makers like Xbox to warn about supply constraints heading into the holidays. The company profiting most from the memory shortage and the companies most squeezed by its downstream effects overlap significantly, since Samsung both manufactures memory chips for the industry and competes directly against Apple, Sony, and others in finished devices that require those same chips.
The India angle
India doesn't manufacture the high-bandwidth memory driving Samsung's profit surge, but Indian consumers are already feeling its downstream effects directly, through higher prices on iPads, tablets, and premium smartphones across every brand competing in the market. Samsung's own India-facing product lines aren't immune either, the Galaxy Tab S12 leak reported earlier this month specifically cited memory costs as a factor in its expected price increase over the Tab S11 generation, meaning Samsung's record global profits and higher prices for Indian buyers on Samsung's own devices are directly connected rather than coincidental.
There's a longer-term angle worth watching too. India has been pushing to build out its own semiconductor manufacturing capacity through initiatives like the India Semiconductor Mission, and a global environment where memory chip profits have become this lucrative could either accelerate international investment interest in Indian chip fabrication, or make it harder for a nascent industry to compete against established players like Samsung who are currently capturing record margins on existing capacity.
What to watch
Watch for Samsung's full Q2 2026 earnings report later this month for a detailed breakdown, and watch whether Nvidia's own upcoming quarterly results reclaim the most-profitable-company title or confirm Samsung's lead holds. The bigger question worth tracking through the rest of the year is whether memory prices start easing as manufacturers respond to demand, which would determine whether this quarter represents a new normal for Samsung or a temporary peak.
Published July 9, 2026. Gadgets365 will update this article as more information becomes available.
