Key Points Summary
Samsung Electronics’ performance in the second quarter of 2026 was stunning: revenue reached approximately 760.1 billion RMB (a year-on-year increase of 129%), and operating profit amounted to around 397.4 billion RMB (a year-on-year surge of 1810%, equivalent to a daily earnings of 4.3 billion RMB), far exceeding Micron Technology’s profits for the same period. The significant growth was mainly due to the turnaround in its high-end AI storage (HBM) and wafer foundry businesses, as well as the release of the fastest new products in the industry for mobile storage (UFS used in smartphones). Interestingly, despite the positive financial results, the stock price fell by 7% after the announcement; however, the stock has still increased by 182% so far this year.
I. How impressive are the earnings? Daily earnings of 4.3 billion RMB, outpacing Micron
Samsung’s profit for this quarter means an average daily income of 4.3 billion RMB (397.4 billion ÷ 90 days ≈ 4.4 billion, rounded to 4.3 billion). This is several times the quarterly profits of some leading domestic internet companies. Comparing with Micron, the global storage leader: Micron’s latest quarter profit was around 226.4 billion RMB, while Samsung’s profit was more than 170 billion RMB higher, nearly 1.75 times that of Micron. Revenue also increased by over 100%, indicating that Samsung not only sold more products but also made a larger profit—this is the confidence of a monopolistic leader.
II. Why such strong earnings? AI storage HBM is a “money-making machine”
Samsung’s profits primarily come from its high-end AI storage chips, HBM (which can be thought of as high-speed memory for feeding large AI models). AI operations require processing massive amounts of data instantly, and regular memory is insufficient; HBM acts like a “superfast delivery channel” for AI.
- In February this year, HBM4 began mass production, and all the capacity was quickly snapped up by customers such as NVIDIA and AMD.
- Starting from the third quarter, HBM4 will account for more than half of Samsung’s HBM business revenue and contribute about half of its annual earnings.
- The even more advanced HBM4E has already been sampled to customers, with performance improved by 20% and a bandwidth of up to 3.6TB/s (equivalent to transferring the content of 3.6 1TB hard drives in one second). It uses the most advanced manufacturing processes, making mass production highly feasible.
In short, the more popular AI models become, the greater the demand for HBM, and with Samsung having inventory and the ability to continuously upgrade its products, its profits will continue to soar.
III. Wafer foundry business turns a profit for the first time in 2023
Samsung’s wafer foundry business (which produces chips for others) had been losing money until it finally turned a profit in June this year. There are two main reasons for this turnaround:
1. A surge in orders for HBM “wafers”: HBM requires stacking multiple memory chips together, and these wafers need to be produced by foundries.
2. Improvement in 4nm manufacturing process yield: Higher yields mean fewer defective chips, reducing costs.
The profit from the foundry business has further boosted Samsung’s overall earnings.
IV. Major breakthroughs in mobile storage: Smartphones and XR devices are set to become faster
In addition to HBM for AI applications, Samsung has made significant advancements in storage for mobile devices: it introduced UFS5.0 (the storage chip used in smartphones, essentially the “hard drive” of the phone):
- Double speed: Reading speeds have increased to 10.8GB/s, and writing speeds to 9.5GB/s, more than doubling compared to the previous generation (for example, downloading a 4K movie now takes about 2 seconds instead of 10 seconds).
- Improved energy efficiency: Energy consumption has been reduced by 40%, extending battery life.
- Smaller size: The chip size has been reduced by 16.7%, allowing for thinner phones or the inclusion of larger batteries.
- Mass production is scheduled for the fourth quarter of this year, with capacities up to 1TB, covering smartphones, smart wearables, and XR devices (such as VR glasses).
This means that future smartphones and VR devices will run AI applications more smoothly and quickly.
V. Good earnings, but why did the stock price fall? What’s the market worried about?
Despite the impressive financial results, the stock price dropped by 7%. There are two main reasons:
1. All the positive news was already factored into the stock price earlier this year (with a 182% increase), so some investors are selling their shares to realize profits.
2. Short-term concerns: Could new competitors emerge? Or could demand for AI suddenly decline? The storage chip industry is cyclical, and there have been previous periods of losses, so investors are cautious about the sustainability of this growth.
However, in the long term, as demand for AI and smart devices continues, Samsung’s advantage in high-end storage will remain, and the industry landscape may become increasingly concentrated among leading players.
Conclusion
Samsung’s significant earnings are driven by the demand for high-end storage in AI and smart devices. The company that can mass-produce the most advanced HBM and UFS first will gain a larger market share and higher profits. The competition in the storage industry will focus on cutting-edge technology and production speed. Samsung is currently ahead, but competitors like Micron and SK Hynix are catching up, and this “storage battle” is just beginning.