Samsung Electronics’ semiconductor (DS) division may report lower Q3 earnings than SK Hynix, as the latter continues to dominate the high-bandwidth memory (HBM) market.
Concerns over a prolonged semiconductor downturn are now compounded by fears that Samsung could lose its position as the world’s top DRAM supplier. Reflecting this uncertainty, Samsung’s market cap share on the KOSPI has dropped to a two-year low.
Q3 Earnings Forecast: Samsung vs. SK Hynix
Samsung Electronics is set to release its Q3 preliminary results on October 8. While detailed segment earnings will not be disclosed, the DS division is expected to contribute over 50% of total operating profit.
According to FnGuide, Samsung’s Q3 projections are:
Revenue: ₩80.9 trillion
Operating profit: ₩10.77 trillion
DS division operating profit: ₩5 trillion range
Memory business profit estimate: ₩5.2 trillion – ₩6.3 trillion
Since Samsung’s foundry and system LSI segments remain weak, most of the DS division’s earnings will come from memory chips.
In contrast, SK Hynix is expected to report:
If these forecasts hold, SK Hynix’s memory business could surpass Samsung’s DS division by ₩400 billion to ₩1.5 trillion.
This would mark another quarter where SK Hynix outperforms Samsung’s semiconductor division, after having done so for five consecutive quarters from Q1 2022 to Q1 2024. Samsung briefly regained its lead in Q2 2024, but its position is once again at risk.
Analysts now speculate that SK Hynix could overtake Samsung in full-year semiconductor operating profit, something previously unimaginable.
HBM: The Market Shift Driving SK Hynix’s Edge
The HBM segment is a key driver of this shift. HBM chips are 3 to 5 times more expensive than standard DRAM, and SK Hynix currently leads this market, securing lucrative contracts with major AI players like NVIDIA.
Reflecting these concerns, Macquarie recently downgraded Samsung’s investment rating from "Buy" to "Neutral" and slashed its target price by 50%, from ₩125,000 → ₩64,000.
Following Macquarie’s report, domestic securities firms also lowered their price targets, further pressuring Samsung’s stock.
On October 2, Samsung hit a 52-week low of ₩59,900 intraday. As of last month, Samsung’s common stock market cap share on the KOSPI fell to 18.61%, its lowest level since October 2022 (18.05%).
Samsung’s Response: AI Vision Amid Competitive Challenges
On October 4, Samsung hosted its 2024 Tech Forum in Silicon Valley, gathering global industry leaders to discuss AI and future business strategies.
At the event, Han Jong-hee, CEO of Samsung DX (Device eXperience) division, emphasized:
“Samsung is committed to developing AI that enhances daily life.”
“Through 'AI for All,' we envision another technological transformation for the future.”
However, Samsung’s AI ambitions contrast sharply with its current market challenges. The company’s lagging position in the HBM market suggests that it is struggling to translate its AI vision into real technological leadership.
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