Samsung’s Memory-Driven Profit Explosion

Samsung, it seems, deserves a little more respect. The electronics conglomerate may be best known in the U.S. for its TV sets and smartphones, which jostle with the iPhone for attention, but it’s also one of the three biggest makers of memory chips globally (along with Micron Technology and SK Hynix). The explosion of that business, thanks to demand from AI data centers, has turbocharged profits at all three companies—with Samsung providing fresh evidence of that on Tuesday.

Samsung issued a “pre-earnings guidance” notification—which we usually see from companies about to drop bad news they think investors need to hear as soon as possible—that its second-quarter operating profit would be about 89.4 trillion Korean won, or $59 billion. That would be up 1,800% on the year-earlier operating profit of just $3.1 billion. That’s even better than the 1,435% growth Micron reported in its operating profit a couple of weeks ago for the May quarter. Hynix, which is planning to list on the Nasdaq later this week, hasn’t yet reported for the second quarter. (Ironically, investors sold Samsung stock 7% down on Tuesday, apparently expecting even better growth—some people are never satisfied.)