Samsung is ready to start selling advanced HBM3E memory this quarter

Investors appeared to turn a blind eye to Samsung’s semiconductor operating profit decline of 40% sequentially once they heard management’s announcement that it would begin selling the cutting-edge HBM3E in the fourth quarter. Shares of the South Korean giant rose in price by 3.6%, although the overall results of the previous quarter were not particularly favorable for this.

Image Source: Samsung Electronics

First of all, as Bloomberg notes, Samsung Electronics Executive Vice President Jaejune Kim, who is responsible for memory production, admitted that there has been significant progress in certifying the latest generation of HBM3E chips with a major client, which is easily identified as Nvidia. According to him, Samsung is going to start shipping advanced HBM3E chips in the current quarter. Before this, we recall that Samsung regularly had difficulties obtaining such a certificate, although Nvidia management demonstrated its interest in using HBM3E produced by Samsung back in the spring of this year. However, it is not yet possible to estimate how massive the supply of 12-tier HBM3E memory chips produced by Samsung will be in the current quarter, if we are talking about them. One way or another, the share price of rival SK hynix, which controls half the market, fell by 4.6% today.

Let us recall that Samsung’s operating profit in the semiconductor segment in the third quarter not only decreased sequentially by 40%, but also did not meet analysts’ expectations. SK hynix posted a record operating profit last quarter, promising to begin shipping its 12-tier HBM3E chips in the current quarter. Samsung is ready to increase production of HBM3E to the detriment of other types of memory; it has also made this area a priority for capital expenditures. Expecting to spend $35 billion on these needs this year, Samsung plans to launch HBM4 production in the second half of next year.

In the contract chip manufacturing segment, Samsung notes that capital expenditures this year will decrease compared to last year, but the company still intends to update its production lines specializing in mature lithography. The company expects to increase its own revenue in the contract segment by improving the yield of suitable products using advanced technical processes. The global market for such services in monetary terms will grow by double-digit percentages next year, according to Samsung management.

The smartphone segment will consistently grow in the current quarter, demand for older models will contribute to this, but the main competition will be observed in the mid-price range. Because of this, both the supply volumes of devices and their average selling price may change.