Starting this week, major domestic electronics and components corporations are expected to announce their second-quarter performance, with SK hynix anticipated to surpass an operating profit of 9 trillion won for the first time in history. In contrast, Samsung and LG Electronics affiliates are forecasted to perform worse than estimates. Sales to major finished goods clients, including Apple, are decreasing, and competition with Chinese companies is intensifying.
According to industry reports on the 22nd, Samsung Electronics' semiconductor institutional sector, which announced its performance guidance, is estimated to have an operating profit of less than 1 trillion won for the second quarter, with major parts affiliates such as Samsung Electro-Mechanics also expected to underperform. Earlier, LG Electronics, which announced its second-quarter results, also saw its operating profit drop by half compared to the previous year, with lowered expectations for LG Innotek and LG Display's performances.
SK hynix is expected to continue its performance momentum thanks to sales of high-bandwidth memory (HBM). The consensus for SK hynix's second-quarter revenue and operating profit is forecasted at 20.61 trillion won and 9.1 trillion won, respectively, marking increases of 25.5% and 64.9% compared to the previous year. An operating profit of 9 trillion won would exceed the previous record set in the fourth quarter of last year, which was 8.08 trillion won. The rapid increase in demand for HBM due to the spread of generative artificial intelligence (AI) has led SK hynix to become the first company to surpass Samsung Electronics in terms of market share in the global DRAM market in the first quarter of this year.
Earlier, LG Electronics disclosed a provisional operating profit nearly halved compared to the same period last year on the 7th. LG Electronics recorded an operating profit of 639.1 billion won in the second quarter, which represents a 46.6% decrease year-over-year. Revenue was 20.74 trillion won, down 4.4% compared to the same period last year.
LG Electronics' performance is below the initial market expectations. According to market information provider FnGuide, the securities consensus for LG Electronics' second-quarter revenue is 21.4973 trillion won and operating profit is 856.3 billion won. Actual revenue is approximately 700 billion won less, and operating profit is about 200 billion won less.
Major components companies such as LG Innotek, LG Display, and Samsung Electro-Mechanics are expected to report underwhelming performances due to poor order volumes from global finished goods companies and a drop in exchange rates. In particular, LG Innotek is projected to experience the most significant decline among the three LG Group electronics affiliates. According to financial information provider FnGuide, LG Innotek's second-quarter operating profit consensus is estimated at 42.1 billion won, reflecting a 72.2% year-over-year decrease. Some securities firms are projecting that LG Innotek will achieve operating profits lower than consensus, in the range of 20 to 30 billion won.
The camera module business, which accounts for more than 80% of LG Innotek's revenue, has seen performance decline due to intensified competition from Chinese companies, a drop in exchange rates, and major clients advancing orders to the first quarter ahead of reciprocal tariffs imposed by the United States. Kim Jong-bae, a researcher at Hyundai Motor Securities, noted, "The sharp drop in exchange rates due to the difference between the exchange rate at the time of materials and supplies purchase (CIS) and the exchange rate at the time of product sales (camera module) has led to significant exchange losses."
Samsung Electro-Mechanics is forecasted to have an operating profit of 174.3 billion won in the second quarter, which is expected to be similar to the same period last year. Although it recorded an operating profit in the first quarter that increased by 9% compared to the same period last year, the second quarter will likely be affected by a drop in exchange rates and client orders that were advanced from the first quarter.
For LG Display, an operating loss in the 600 billion won range is anticipated for the second quarter. In the first quarter, it recorded an operating profit in the 300 billion won range, but with seasonal downturns, declining exchange rates, and the impact of tariffs, its performance has worsened again. However, the company maintains that a return to annual profitability after four years should not be a problem, due to expected supply increases following new product launches from major clients in the second half of the year.