Samsung Electronics posted an operating profit margin of 52 percent in the second quarter of 2026. That was up 9 percentage points from 43 percent in the previous quarter. Samsung Electronics said on a conference call held on Wednesday that revenue was 171.5 trillion won and operating profit was 89.5 trillion won, both record highs. Revenue rose 130 percent from a year earlier and operating profit increased 1,813.83 percent. For the first half, revenue totalled 305.4 trillion won and operating profit 146.7 trillion won.

Profit came virtually from semiconductors alone. The DS division posted revenue of 127.5 trillion won and operating profit of 89.2 trillion won. That accounted for 99.7 percent of companywide operating profit. The DX division posted revenue of 48 trillion won and an operating loss of 800 billion won. The display business recorded revenue of 7.5 trillion won and operating profit of 700 billion won, and Harman posted revenue of 4.6 trillion won and operating profit of 400 billion won.

Memory prices lifted the margin. Kim Jae-joon (김재준), a vice president and head of the Strategy Marketing Office at Samsung Electronics' memory business, explained on the conference call that second-quarter ASP, or average selling price, rose by the mid-40 percent range for DRAM and the high-60 percent range for NAND versus the previous quarter. Higher volume also helped. DRAM bit shipments rose by the low-10 percent range from the previous quarter, exceeding company guidance, while NAND rose by the low single-digit range, in line with guidance.

Profit rose further on a currency impact. Park Soon-cheol (박순철), a vice president and CFO at Samsung Electronics, said dollar strength against the won had a positive effect of about 3.1 trillion won on companywide operating profit from the previous quarter, mainly in the components business.

Spending also increased. Second-quarter R&D costs rose to 16 trillion won from 11 trillion won in the previous quarter, a record high. Facility investment rose to 16.8 trillion won, up 5.5 trillion won from the previous quarter, including 15.4 trillion won in the DS division and 700 billion won in display. Samsung Electronics said memory saw increased infrastructure investment including a new Pyeongtaek fab, and foundry investment rose to ensure timely operation of the Taylor fab in the United States.

◆ Part of performance bonus provision deferred to third-quarter cost of sales

One point of focus in the results was an accounting timing gap. Samsung Electronics accrued special performance bonuses that had not been reflected in the first quarter, booking them cumulatively for the first half in the second quarter. Park said the amount was about 10.5 percent of operating profit accumulated for the half year. Based on first-half operating profit of 146.7 trillion won, that is about 15.4 trillion won.

Not all of the provision was reflected in second-quarter profit and loss. Park said part of the provision was included in work-in-process inventory costs as labour expenses within manufacturing costs, and the remaining provision will be recognised as cost of sales when the inventory is sold to customers. He said costs will be recognised from the third quarter in connection with inventory sales. That means performance bonus expenses not reflected in this quarter's profit will carry over to the next quarter.

The third-quarter shipment outlook was presented conservatively. Kim said inventories for both DRAM and NAND are noticeably low, and he expects third-quarter bit growth to rise by the mid single-digit range for DRAM and the high single-digit range for NAND.

The outlook for the second half differed by division. Park forecast that strong semiconductor demand would continue in the second half, sustaining companywide growth momentum. For the DS division, he pointed to expanding sales of HBM4, including HBM4E, as well as DDR5, SOCAMM2 and SSDs, and for foundry he cited improving results through orders for advanced processes and AI and HPC, or high-performance computing. For the DX division, he projected that despite new product launches, an adverse business environment would persist due to global economic uncertainty and rising raw material and component costs, making profitability management an important task.

A shareholder return plan has not yet been finalised. The board approved a second-quarter dividend of 374 won per share for both common and preferred shares. Total quarterly dividends are 2.45 trillion won, and total annual regular dividends are 9.8 trillion won. Park said that under a policy to pay out 50 percent of FCF, or free cash flow, advance payments under LTAs, or long-term supply agreements, with memory customers and share buybacks for employee performance-bonus compensation could affect FCF. He said specific implementation measures, including special dividends, are under discussion.

On the timing of share buybacks, Park said, "Rather than implementing it in a single large-scale move, we will derive the optimal plan by considering both shareholder value enhancement and the effect of employee compensation." He said holding and disposing of treasury shares for employee compensation must go through relevant procedures, including shareholder meeting approval, under the revised Commercial Act.

He ruled out the possibility of listing American depositary receipts. Park said some media had reported the possibility of a U.S. listing, but the company is not reviewing issuing ADRs at this time. He cited the company having secured stable cash generation capacity based on a diverse business portfolio, meaning there is not a high need for ADRs to raise new funds. He added that the matter could be reviewed from a mid- to long-term perspective of enhancing shareholder value, leaving only the possibility open.