On July 30, 2026, Samsung Electronics announced that its April-June quarter revenue reached a record 171.5 trillion won, with operating profit also hitting a record 89.5 trillion won. The operating profit represents an extraordinary 1,814% year-on-year increase, and it also grew 56% compared to the immediately preceding January-March quarter. The Device Solutions (DS) division, which handles semiconductors, earned 89.2 trillion won, while the Device eXperience (DX) division—covering smartphones, TVs, and home appliances—fell into an operating loss of 0.8 trillion won. Memory prices driven up by AI server demand and rising component costs on the finished-goods side have produced diametrically opposite profit-and-loss outcomes across Samsung's businesses.
The 1,814% Increase Combines a Low Prior-Year Base With Current Acceleration
Operating profit for the same quarter last year was 4.7 trillion won, with an operating margin of 6.3%. In the DS division during April-June 2025, inventory valuation adjustments for memory, combined with one-time costs in the non-memory business stemming from export restrictions to China, weighed down profit. The DS division's operating profit at the time was a mere 0.4 trillion won. This quarter's 1,814% increase reflects a rebound from that low comparison base.
On top of the low comparison base came the current quarter's profit growth. In January-March 2026, Samsung had already recorded what was then a record operating profit of 57.2 trillion won and an operating margin of 42.8%. In April-June, operating profit rose a further 32.3 trillion won from that level, pushing the margin up to 52.2%. Operating profit grew 56% quarter-on-quarter, outpacing the 28% growth in revenue, meaning profitability improved even further.
The income statement makes the shift clear. Cost of revenue rose only about 6%, from 49.1 trillion won in the same quarter last year to 52.2 trillion won, while revenue surged 130%, from 74.6 trillion won to 171.5 trillion won. Gross profit expanded from 25.5 trillion won to 119.3 trillion won, with the gross margin reaching 69.6%. Samsung has not disclosed how much of the profit increase is attributable to price, sales volume, or product mix respectively, but it cites industry-wide memory price increases and growth in high-value-added products for servers as the drivers of higher profit.
The quarterly operating profit of 89.5 trillion won is roughly 2.1 times the full-year 2025 operating profit of 43.6 trillion won. Because the comparison periods differ, this ratio alone cannot be used to judge the sustainability of earnings. Still, it is clear that beyond simply rebounding from last year's one-time costs, the underlying profit level itself has shifted.
Earnings per common share (EPS) came to 10,849 won. The 52% increase mentioned in the earnings release is a comparison against the January-March figure of 7,123 won. Confusing this with the year-earlier figure of 737 won would mean reading the EPS growth on the same basis as the 1,814% operating profit increase—which would be a mistake.
The consolidated figures released this time are based on K-IFRS, but external review has not yet been completed. Samsung explicitly notes in its earnings materials that some figures may change pending the results of that review.
Memory's Earning Power Expanded Through a Server-First Allocation
The DS division posted revenue of 127.5 trillion won and operating profit of 89.2 trillion won. Its operating margin was 70%, meaning the division accounted for nearly the entirety of the company's total operating profit of 89.5 trillion won. Since DS includes System LSI and Foundry in addition to memory, the 89.2 trillion won cannot be regarded as memory's profit alone. Even so, the fact that memory business revenue of 120.8 trillion won made up the bulk of DS revenue, growing 62% from 74.8 trillion won in the previous quarter, clearly illustrates where the profit is coming from.
Samsung prioritized its limited production capacity for server products. Both DRAM and NAND achieved record bit-shipment volumes, and the share of server-related revenue also hit a record high. The company expanded sales of HBM4 and shipped samples of its next-generation HBM4E to major customers. Demand also broadened to conventional server DRAM and enterprise SSDs, widening the base of server-related revenue.
The improvement in Foundry profitability comes with caveats. Samsung explains that profit excluding incentive-related provisions improved significantly, driven by demand for HBM base dies and orders from U.S. customers. Design wins also increased, including for 2nm HPC projects. However, Foundry's standalone revenue and operating profit were not disclosed, so it cannot be confirmed that the division has turned profitable on its own. Increasing production of second-generation 2nm mobile products and expanding sales of 4nm LPUs and base dies are planned for the second half of 2026.
Revenue Rose but Profit Fell: Component Costs Hit the DX Division
The DX division posted revenue of 48.0 trillion won against an operating loss of 0.8 trillion won. Combined, the MX and Networks businesses posted a 0.7 trillion won loss even as revenue rose 14% year-on-year to 33.2 trillion won. The same quarter last year had secured an operating profit of 3.1 trillion won, and the immediately preceding quarter 2.8 trillion won. The Galaxy S26 series and A series supported revenue, but this was not enough to absorb the industry-wide rise in component costs.
VD & DA, which includes TVs and home appliances, also swung to an operating loss of 0.01 trillion won on revenue of 14.5 trillion won. TV demand tied to sporting events and air conditioner sales helped boost revenue, but rising costs erased the 0.2 trillion won profit posted in the previous quarter. Meanwhile, Samsung Display posted an operating profit of 0.7 trillion won, and Harman posted 0.4 trillion won. Together, these two companies' combined 1.1 trillion won exceeded DX's 0.8 trillion won loss, leaving the businesses outside DS with a net profit of 0.3 trillion won. Combined with DS's 89.2 trillion won, this produces the company-wide operating profit of 89.5 trillion won.
Because Samsung holds both components and finished products under one roof, it experiences both the gains and the losses from the same supply-demand swings. Rising prices for AI server memory and rising component costs for the units making smartphones and TVs progressed in the same quarter. That said, Samsung has not broken down DX's cost increases by component, nor has it disclosed internal transfer prices. Rather than viewing this as DS's profit being effectively transferred away by DX, it should be read as a difference in business composition amid tight memory supply and demand.
Supply Shortages Underpin Margins in the 70% Range
High profit margins are not unique to Samsung. SK hynix, which reported its April-June 2026 earnings the day before, posted revenue of 79.3187 trillion won, operating profit of 60.5426 trillion won, and an operating margin of 76%. DRAM and NAND prices rose sharply from the previous quarter, with HBM, AI server DRAM, and enterprise SSDs driving profitability higher. The company says it has signed long-term supply agreements with about 10 companies, including major customers. While its business scope does not exactly match Samsung DS, this confirms that margins in the 70% range are tied to tight supply and demand in the AI memory market.
Samsung expects demand for server DRAM, enterprise SSDs, and HBM to accelerate further in the second half of 2026, driven by AI infrastructure investment and the spread of agentic AI. It anticipates that supply shortages will persist even if mobile and PC demand softens somewhat. In preparation, the company increased its R&D spending 78% year-on-year to 16.0 trillion won in the April-June quarter. Whether shipping HBM4E samples and winning 2nm design contracts translate into the next round of mass production and revenue remains to be seen.
Profit has already begun converting into cash. Operating cash flow for the April-June quarter reached 105.08 trillion won, cash and equivalents stood at 190.00 trillion won at the end of June, and net cash after subtracting liabilities came to 167.59 trillion won. The company spent 14.11 trillion won on acquiring tangible fixed assets. As it works to expand supply capacity and develop next-generation products, the question of whether it can maintain investment efficiency once memory prices normalize remains open.
Sustaining the 89.5 trillion won profit level requires two conditions beyond memory pricing itself: whether the DS division can maintain its 70% margin even as it increases supply of server products, and whether the finished-goods division can absorb rising component costs and return to profitability. Only when both conditions are met simultaneously will Samsung's record-breaking earnings shift from an extreme one-quarter figure to growth supported by multiple businesses.