Samsung forecast to post record quarterly operating profit — Korea Herald

Samsung Electronics in South Korea may for the first time earn more than 100 trillion won in operating profit in a quarter, which the source estimates at approximately $74 billion. The average forecast of DB Securities, Mirae Asset Securities and BNK Securities projects that the company’s operating profit in the third quarter will amount to 107.7 trillion won — 20.3% more than the 89.4 trillion won in the second quarter, Korea Herald reports.

DRAM profitability

Analysts at the three brokerage firms expect the operating margin of the Device Solutions division, which is responsible for Samsung’s semiconductor business, to reach 72–75%. The operating margin for DRAM, which includes high-bandwidth memory HBM and conventional products, may exceed 80%.

Research company TrendForce forecasts that DRAM prices will rise by 13–18% in the third quarter compared with the previous quarter. This is significantly slower than the approximately 60% increase a quarter earlier.

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Capacity reallocation

Analysts link the high margins to the reallocation of production capacity. Samsung and other manufacturers are directing more advanced DRAM capacity toward HBM and high-capacity server memory, leaving less capacity for conventional DRAM. At the same time, demand for server DDR5 is growing amid investment in data centers for artificial intelligence systems.

Kim Dong-won, head of research at KB Securities, expects HBM to account for 40% of Samsung’s total DRAM production capacity next year, compared with 33% this year. The share of conventional DRAM, in his estimate, will decrease from 65% to 59%. He also noted that the delivery lead time for high-capacity server DDR5 increased to 52 weeks this month, whereas under normal conditions it is about six weeks.