Samsung Electronics posted operating profit of more than 89 trillion won in the second quarter of 2026. It was the largest on record, up 1,810 percent from a year earlier. But the shares fell nearly 6 percent on the day of the announcement. That was a signal the market had already priced in even more.

Samsung Electronics said on July 7 it posted preliminary consolidated revenue of 171 trillion won and operating profit of 89.4 trillion won for the second quarter. Revenue rose 129.3 percent from a year earlier and operating profit climbed 1,810.26 percent. Since the fourth quarter of last year, it has set record highs for both revenue and operating profit for three straight quarters.

Stripping out performance-bonus factors makes the underlying profit appear larger. Labour and management agreed to allocate 10.5 percent of operating profit in the semiconductor (DS) division as funding for special performance bonuses. Provisions of 6 trillion won in the first quarter and 11 trillion won in the second quarter were reflected. Excluding those, second-quarter operating profit is estimated at about 106.5 trillion won. That effectively marks the first time quarterly operating profit has topped 100 trillion won. That single quarter exceeds the combined operating profit of 82.9 trillion won over 2023 to 2025.

Memory is believed to have lifted results. Figures by business unit were not disclosed, but the DS division is estimated to have accounted for most of companywide profit. Brokerages estimate second-quarter semiconductor operating profit topped 80 trillion won and say it may have neared 100 trillion won excluding provisions. The DS division operating margin is seen at around 80 percent. Expanding investment in artificial intelligence data centres tightened supply and demand not only for high-bandwidth memory (HBM) but also for commodity DRAM and NAND, pushing average selling prices higher. iM Securities estimated second-quarter DRAM and NAND average selling prices rose by more than 40 percent and the mid-60 percent range, respectively. Counterpoint Research estimated the second-quarter memory market size will grow more than 60 percent from the previous quarter to about 350 trillion won.

A rebound in HBM also supported results. Samsung Electronics began mass production and shipments of sixth-generation HBM4 in February, the first in the world, and exceeded $1 billion in related sales in about four months. It was recently reported to have also topped about $1.2 billion. The product will be used in Nvidia's next-generation AI accelerator, 'Vera Rubin', to be released in the second half. The follow-on HBM4E is reported to have lifted reliability-test yields to more than 70 percent, prompting assessments it is nearing a stable mass-production range.

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The report card and the share price moved in opposite directions on the day of the announcement. On the morning of July 7, Samsung Electronics fell 5.90 percent and SK Hynix dropped 4.40 percent, while the KOSPI slid as much as 6 percent intraday, triggering a sell-side car. It followed a flood of profit-taking despite the surprise. Factors cited include heavy profit-taking pressure after the KOSPI rose 91 percent since the start of the year to log the highest return among major countries, and increased volatility tied to the emergence of single-stock leveraged products in late May.

The key is memory prices in the second half. Brokerages expect the supply shortage to last for a considerable period. iM Securities said it sees a high possibility that third-quarter DRAM and NAND average selling prices will rise another 15 to 20 percent, respectively. It also said there are views that memory demand for IT devices such as smartphones could slow due to price burdens.

As a result, market attention is shifting from the record results themselves to whether the company can reach 400 trillion won in operating profit for the full year. The highest brokerage forecast is 422 trillion won from Daol Investment & Securities and the lowest is 353 trillion won from BNK Investment & Securities, a wide gap. Ultimately, third-quarter DRAM and NAND price negotiations, expanding HBM4 supply and whether it signs long-term supply agreements (LTAs) with major data-centre customers are expected to be decisive for second-half results. Samsung Electronics plans to invest the profit it has earned into expanding production capacity in the Yongin national industrial complex and the Honam region. Detailed results will be disclosed at a conference call on July 30.