Samsung Electronics Co. expects its earnings to recover in the second half of this year, banking on rising demand for its premium high-bandwidth memory (HBM) chips and improved foundry performance after reporting poor second-quarter results.
“We project a rebound in the second half after hitting bottom in the second quarter,” Park Soon-cheol, chief financial officer at Samsung Electronics, said during a second-quarter earnings conference call on Thursday morning. “We will go all-out to restore the competitiveness of our semiconductor technology.”
South Korea’s memory chip giant will aim to regain ground in the semiconductor market by beefing up sales of HBM3E and HBM4 chips and advancing its thinnest 2-nanometer chip fabrication technology.
The company expects HBM3E, the fifth-generation HBM chip, to account for more than 90% of its entire HBM chip sales volume in the latter half, up from 80% in the second quarter.
Samsung also said it completed development of HBM4, the sixth-generation HBM chip, and has shipped samples to customers. It is targeting mass supply in 2026, positioning itself to capture a greater share of the fast-growing AI chip market.
Samsung Electronics' HBM3E chip (Courtesy of Samsung Electronics) “To meet an anticipated increase in demand for HBM4 chips next year, we will continue investing in expanding our 1c DRAM production capacity,” said Kim Jae-joon, vice president at Samsung Electronics’ memory chip business.
Mass production of 1c DRAM is scheduled to begin by year-end, following successful internal quality tests completed on June 30.
The 1c DRAM, used as a core die for HBM4, is an advanced model of the 1b DRAM – the fifth-generation 10-nanometer DRAM that is mainly used by Samsung’s HBM competitors.
SECOND-QUARTER STRUGGLES MARK TURNING POINT
Samsung pictures a brighter outlook for its memory business after reporting poor results in the second quarter.
Earlier Thursday, the company reported 400 billion won ($288 million) in operating profit for its Device Solutions (DS) division, which oversees its semiconductor business, for the April-June quarter.
This marked the unit’s lowest profit since a 2 trillion won operating loss in the fourth quarter of 2023.
The division’s sales reached 27.9 trillion won, down 2% from a year ago, but up 11% from the previous quarter on brisk sales of premium memory products and a rise in foundry revenue, it said.
Samsung Electronics' next-generation chip R&D center (Courtesy of Samsung Electronics) The company blamed a sizable one-off memory inventory loss reserve – a financial allowance set aside to account for potential losses in the value of inventory – and a write-down in its non-memory, or foundry, business following new export restrictions on chips to China for the unit’s operating shortfall.
Looking ahead, Samsung said it will prioritize improving utilization at its foundry lines and boosting shipments to major clients, a key focus as it seeks to reverse recent losses.
Samsung has also secured Qualcomm Inc. as a new foundry customer after losing Google LLC, its longtime foundry customer, to Taiwan Semiconductor Manufacturing Company Ltd. (TSMC), the world’s largest contract chipmaker.
OTHER DIVISIONS FARE WELL
Outside semiconductors, Samsung’s consumer-facing businesses remained a steady contributor.
Its Device eXperience (DX) unit, which oversees mobile, network, TV and home appliance businesses, reported 3.3 trillion won in operating profit on sales of 43.6 trillion won.
Samsung's Galaxy Z Fold7 (Courtesy of Samsung Electronics) Against a year ago, operating income rose 22.2% while sales added 4% thanks to a solid gain in sales of its flagship Galaxy S25 smartphone series.
