AI MEMORY BOOM DRIVES EARNINGS
Memory chips are expected to account for the bulk of the earnings improvement. Analysts expect supply to continue to lag demand, with the imbalance potentially widening in 2027 as AI-related demand absorbs an increasing share of global memory capacity.
Against that backdrop, conventional DRAM bit shipments are expected to remain broadly flat because of limited inventories, while HBM shipments could rise sharply from the previous quarter on strong demand for HBM4, analysts said.
Douglas Kim of Douglas Research Advisory estimated that Samsung’s HBM bit shipments expanded by close to 50 per cent quarter-over-quarter in the third quarter.
US rival Micron, a key supplier of high-bandwidth memory to Nvidia, said the chip market could be tighter in 2027 and 2028 than this year, after forecasting quarterly revenue well above estimates on Wednesday.
A stronger South Korean won may offset some of the gains by reducing the value of dollar-denominated overseas sales when converted into local currency.
The memory chip boom also presents a challenge for Samsung’s other businesses, particularly its smartphone and consumer electronics divisions, which face mounting pressure from higher component costs.
Higher memory prices, while benefiting Samsung’s semiconductor arm, are raising costs for its own smartphones and other electronic devices, squeezing margins in those businesses.
Meanwhile, Samsung’s contract chipmaking, or foundry, business is expected to remain loss-making because of the burden of fixed costs and still-low utilisation rates, analysts said.
However, utilisation is expected to improve over the next several quarters, supported by stronger demand for advanced manufacturing processes. Samsung has been seeking to narrow the gap with industry leader TSMC in advanced contract chip manufacturing.
In a potential boost to its foundry ambitions, AMD CEO Lisa Su said on Wednesday that the US chipmaker continues to explore partnership opportunities with Samsung in the memory and foundry businesses.
