“HBM4 and general-purpose memory to drive Samsung Electronics’ profit growth next year” — Eugene Securities

[Financial News] Samsung Electronics is expected to continue its earnings growth through the remainder of the fourth quarter and next year, buoyed by rising memory chip prices and increased high-bandwidth memory (HBM) supplies. Demand for memory used in AI servers remains robust, while prices for general-purpose DRAM and NAND flash are rising more sharply than expected. Analysts say profitability in the semiconductor business will improve further as mobile memory price hikes early next year coincide with the renewal of HBM supply contracts.
In an analysis report on the 13th, Sohn In-jun, a researcher at Eugene Investment & Securities, said, “Rising memory prices and increased shipments of HBM4 (sixth-generation HBM) will offset the burdens on the foundry (contract chip manufacturing), System LSI and mobile businesses, driving profit growth.”
Following Samsung Electronics’ announcement of preliminary third-quarter results, its memory division is estimated to have posted operating profit of around 110.1 trillion won. This came as average selling prices (ASPs) for general-purpose DRAM and NAND rose 21% and 20%, respectively, from the previous quarter, amid price increases led by server DRAM and enterprise solid-state drives (SSDs). HBM shipments also increased, led by HBM4.
The non-memory (foundry and System LSI) division is estimated to have posted a loss of 1.5 trillion won, despite increased production of HBM4 base dies and higher prices for advanced-node processes, due in part to higher depreciation costs as the Taylor fab ramped up operations. Sohn said, “It will be difficult to meaningfully narrow the losses for the time being, as costs rise with the expanded operation of new plants.”
Even so, results for the fourth quarter and next year are expected to be solid. Sohn said, “Rising memory prices and increased HBM4 shipments will offset the burdens on the non-memory and mobile (MX) businesses, driving profit growth.” He added, “The first quarter of next year, in particular, is a period with considerable potential for further price increases, as higher prices for mobile memory coincide with the renewal of annual HBM contracts.”
He added, “Samsung Electronics is leading this trend with an aggressive pricing policy, and I expect it to continue to maintain the highest average selling price in the memory industry.”
[email protected] Lim Subin Reporter