Samsung Electronics: DRAM price increase to grow in 2H

Samsung Electronics: DRAM price increase to grow in 2H

Samsung Electronics is poised for a rebound in its DRAM market share and profitability in the second half of 2025, driven by anticipated price increases. The company's recent financial performance has shown signs of improvement, particularly in its Device Solutions Division, which includes DRAM and memory products.

The semiconductor giant reported a significant decline in operating profit for the second quarter of 2025, with the Device Solutions Division posting a 93.85% drop in operating profit compared to the same period last year. However, S&P Global Ratings affirmed Samsung's AA-/A-1+ rating with a stable outlook, projecting gradual profitability improvement over the next one to two years [3]. The ratings agency expects Samsung's profitability to recover in the second half of 2025, driven by improvements in the Device Solutions Division and advancements in High Bandwidth Memory (HBM) technology.

SK Hynix, a major competitor, has reported record quarterly earnings, driven by strong demand for HBM and AI-related memory products. SK Hynix's operating profit for the second quarter increased 68% year-over-year to KRW9.21 trillion (approx. US$6.70 billion), while sales rose 35% to KRW22.23 trillion (approx. US$16.16 billion) [1]. The company's operating margin rose to 41%, and its cash reserves grew to KRW17 trillion (approx. US$12.36 billion).

Samsung's DRAM price increase is expected to be driven by tight supply and increasing demand for premium server chips. The company's semiconductor division logged its lowest earnings in over a year due to sluggish demand for high bandwidth memory, but chip sales climbed 11% on-year to KRW27.9 trillion, driven by demand for premium server chips and increased foundry orders [4].

The smartphone division is projected to deliver solid sales with steady revenue growth at low- to mid-single digits. Samsung's display business is forecast to maintain good operating margins of about 10% over the next two years as the company expands into growing OLED TV and IT panel markets.

Samsung is expected to maintain its solid net cash position despite sizable annual capital expenditure of KRW56-58 trillion over the next two years. The company announced a KRW10 trillion share buyback plan in November 2024, with a large portion to be executed in 2025.

References:
[1] https://www.digitimes.com/news/a20250724PD223/samsung-hbm4-production-2026-sk-hynix.html
[2] https://www.koreatimes.co.kr/amp/business/tech-science/20250731/samsung-electronics-operating-profit-drops-552-in-q2-2025
[3] https://www.investing.com/news/stock-market-news/samsung-electronics-aaa1-ratings-affirmed-by-sp-global-93CH-4160687
[4] https://www.koreaherald.com/article/10543729