By the end of October, SK Hynix and Samsung Electronics will announce their results for the third quarter and, as expected, SK Hynix may surpass Samsung Electronics in terms of operating profit from semiconductor production, KoreaTimes writes.
Image Source: SK Hynix
According to analyst consensus, SK Hynix’s operating profit in the third quarter will rise to 6.76 trillion won (about $5 billion), and revenue will be about 17.99 trillion won (about $13.3 billion). If forecasts come true, the company could achieve a record high level of quarterly operating profit, despite the negative outlook for the global memory chip market.
Analysts expect Samsung Electronics’ operating profit in the third quarter to be 10.77 trillion won ($7.96 billion), while the operating profit of its Device Solutions (DS) division will fall to 5.2 – 6.3 trillion won ($3.85). – $4.66 billion). Samsung Electronics does not disclose details for each business unit in its forecast. Experts estimate that DS accounts for more than 50% of the South Korean tech giant’s total operating profit.
This means that SK hynix could surpass Samsung Electronics in chip profit by 400 billion won to 1.5 trillion won, which would be a blow to Samsung’s established reputation as the world’s largest memory chip company. Experts do not rule out that SK hynix may overtake Samsung in terms of operating profit for the year.
The increase in profitability of SK hynix is associated with the increase in the production of HBM chips, which it supplies to NVIDIA, being its largest supplier.
SK Securities analyst Han Dong-hee noted that the growing production of eight-layer HBM3e will lead to a significant increase in the average selling price of SK Hynix memory chips. According to his forecast, the share of HBM sales in the company’s revenue from DRAM production will exceed 30%. HBM is approximately 3 to 5 times more expensive than conventional DRAM products, resulting in higher profitability for SK hynix.
Recently, SK hynix began mass production of 12-layer HBM3e chips. In its second-quarter report, SK hynix said in July that it “expects 300 percent or higher growth in its HBM business this year.”
Samsung Electronics also makes HBM3e chips, but NVIDIA is reportedly still testing its products. According to TrendForce, SK hynix led the global HBM market with a 53% share in 2023, followed by Samsung (38%).