Samsung's expected 108 trillion won quarter rests on chip margins above 70%

The phone and appliance business is a small line in this result. Samsung made 89.4 trillion won of group operating profit in the second quarter ^[3]. Against that, the Device Experience division's 800 billion won loss ^[7] came to about 0.9% ^[4].

The chip margins explain the concentration. The chip division's estimated 72-75% ^[5] is close to what a pure memory maker earns. Micron reported adjusted operating profit of $44.64 billion on revenue of $54.23 billion for its fiscal fourth quarter ^[17], a margin of about 82% ^[7]. Samsung as a whole earned 52.1% in the second quarter ^[1], and the consensus implies 53.6% for the third ^[2]. The gap comes from foundry and System LSI, both expected to stay in the red ^[6], plus the phone and appliance loss. Han Jin-man, who runs the foundry, has cited 2028 as the target for a return to profit ^[6].

Which memory matters is a separate question. The AI case rests on high-bandwidth memory, where Samsung is gaining share from second place ^[8][15]. Park Yu-ak, a semiconductor analyst at Kiwoom Securities, points to the older products. Park said in a report that commodity DRAM and NAND have carried Samsung's earnings to date, and that their prices are expected to gain just 3% and 12% respectively on the previous quarter, with buyers resisting increases and consumer demand still weak ^[13]. He expects the price surge to cool in the fourth quarter as Samsung competes for share with China's CXMT and YMTC ^[14].

HBM is the part of the cycle being sold forward. "We have completed agreements for the vast majority of our calendar 2027 HBM bit supply with significant price increases year-over-year, narrowing the gross margin gap with conventional DRAM," Micron chairman and chief executive Sanjay Mehrotra said ^[18]. Samsung is expected to keep shifting wafer capacity to HBM, and it has projected that HBM will take more than a third of global DRAM wafer capacity in 2027 ^[16]. New lines at Samsung, SK hynix and Micron are not expected before 2027 ^[16].

The preliminary figure, due Oct. 8 ^[2], lands on a consensus that has been moving. The Korea JoongAng Daily put FnGuide's number at 106.94 trillion won as of Friday ^[9]. The Korea Herald put it at 108.1 trillion as of Monday ^[1], 1.16 trillion won higher ^[6]. Some analysts cut their forecasts for the stronger won and for a bonus provision ^[12]. "The won-dollar exchange rate assumption was lowered from 1,440 won to 1,400 won on the recent strength of the local currency, and estimates were cut to reflect a widening loss in the Mobile eXperience division," said Son Ik-jun, an analyst at Eugene Investment & Securities ^[11]. Chip orders are mostly placed from overseas and sold in dollars, with earnings reported in won ^[19].

A guidance figure above 110 trillion won would mean the four estimates published in July were right ^[10] and the won cost less than the cuts assumed. One near 107 trillion would mean the currency and the bonus provision took about what analysts modelled. One under 100 trillion would point to a shortfall in the memory business itself. I think this quarter is mostly a commodity memory price result with HBM growing inside it. That view is wrong if operating profit keeps rising through the fourth quarter while commodity DRAM prices gain only the 3% Park forecasts ^[13], since that would mean HBM contracts are already carrying the growth.