Samsung poised for historic USD 73.4 billion quarterly operating profit on memory demand surge
Driven by a massive surge in memory semiconductor demand, Samsung is poised to hit a historic 100 trillion won operating profit this quarter.
Samsung Electronics is on the verge of making history. The South Korean technology titan is expected to shatter previous records by posting a quarterly operating profit that could reach a staggering 100 trillion won, approximately USD 73.4 billion, thanks to an unprecedented boom in the memory semiconductor market.
A Massive Leap in Earnings
According to reports from The Korea Herald, the tech giant is eyeing a monumental third-quarter operating profit of 108.1 trillion won (~USD 80.2 billion) for the July-September period. This figure represents an astronomical ninefold increase compared to the same period last year.
The company's revenue is also expected to skyrocket, projected to hit 201.7 trillion won (~USD 148.0 billion). This marks a massive 134.4 per cent climb on a year-on-year basis. These figures would not only eclipse Samsung's previous record of 89.4 trillion won in the prior quarter but would also place the manufacturer in the elite league of global earners, alongside giants like Saudi Aramco and Nvidia.
The Memory Chip Engine Driving Growth
The primary engine behind this explosive financial performance is the memory semiconductor segment. The demand for essential components is surging across multiple fronts:
- Conventional DRAM: High demand for DDR5 solutions.
- NAND Solutions: Increased sales of enterprise solid-state drives.
- High-Bandwidth Memory (HBM): A rapid increase in deliveries as AI technologies evolve.
Samsung's dominance in the high-stakes HBM market has seen a significant jump. The company's market share rose to 33 per cent in the second quarter, up from 21 per cent in the first quarter. Looking ahead, analysts expect this momentum to continue as sixth-generation HBM4 chips are expected to be part of Nvidia's Vera Rubin artificial intelligence accelerator later this year.
Division Performance: Winners and Losers
While the semiconductor division is seeing unprecedented success, the company's internal landscape remains a mix of massive wins and ongoing challenges.
The Semiconductor Powerhouse
The Device Solutions division, which oversees semiconductor operations, is projected to achieve an operating margin between 72 per cent and 75 per cent. Even more impressive is the DRAM unit, which manages both standard and high-bandwidth memory; its operational margin is expected to soar above 80 per cent.
Foundry and System LSI Under Pressure
Not all sectors are celebrating. The contract manufacturing (foundry) and System LSI units, which handle non-memory integrated circuit design, are struggling. Both sectors are expected to remain in negative territory for the third quarter. While the foundry division is securing major contracts with global tech firms, the financial benefits are expected to trickle in slowly. Han Jin-man, president and head of the foundry business, has indicated that the unit is working toward a return to profitability by 2028.
Consumer Electronics Facing Headwinds
The Device Experience division, responsible for mobile equipment and consumer electronics, is also navigating difficult waters. Following an operating loss of 800 billion won (~USD 587 million) in the second quarter, the unit is projected to see an even larger deficit. This is attributed to plateauing product demand and rising costs for raw materials and other inputs.