Samsung Chip Profit Hits Record as Mobile Posts First Loss

Samsung's Memory Boom Just Pushed Its Own Phone Business Into the Red

Operating profit rose more than eighteenfold to 89.5 trillion won, with the semiconductor division supplying 89.2 trillion of it. The Galaxy mobile unit posted the first operating loss in its history, squeezed by the component prices its own colleagues are charging.

Samsung Electronics reported second-quarter results on 29 July that are difficult to describe without sounding like a typo. Group operating profit reached 89.5 trillion won — roughly $62 billion — up 1,814% year over year. Revenue was 171.5 trillion won, up 130%.

One division is the company

The Device Solutions semiconductor division produced 89.2 trillion won of that operating profit — about 99.7% of the group total. Its operating margin entered the 70% range for the first time, up from 65.7% the previous quarter. Server memory demand held up on AI infrastructure spending and the spread of agentic AI, with Samsung expecting supply tightness to run into 2027.

And one division is paying for it

The Galaxy mobile business recorded an operating loss of 0.7 trillion won — the first in its history. The cause is the boom itself: memory and component prices set by the same shortage that is enriching the chip division land on the handset division as cost. Samsung is, in effect, watching one half of itself invoice the other.

The market was not impressed

Despite record profit, revenue came in below expectations and the shares fell about 7%. Investors positioned for a flawless print got a lopsided one, and the mobile loss raised a question the memory numbers cannot answer: what the consumer-electronics business looks like if component inflation persists into a second year.

The context

This lands two days after Korean chip stocks crashed — Samsung fell 13.39% and SK Hynix 14.65% on 28 July, tripping the KOSPI's circuit breaker. The results say the fundamentals are extraordinary; the tape says the market is pricing something else entirely.

Why It Matters

The AI memory cycle is no longer just lifting suppliers — it is redistributing profit inside single companies. Samsung is the clearest case: the same shortage that produced a record quarter produced the first loss its phone business has ever reported, and every device maker without a captive fab faces that squeeze without the offset.