As Samsung Electronics announced a surprise third-quarter result, confirming entry into a boom cycle for memory semiconductors, projections are emerging that SK hynix's third-quarter results this year will reach 12 trillion won for the first time since the company was founded. Powered by investment in artificial intelligence (AI) infrastructure, SK hynix, which has enjoyed high profitability centered on high bandwidth memory (HBM), is expected to post results exceeding previous forecasts as the price increases for commodity memory add to the momentum.
On the 16th, the securities industry said it is steadily raising its outlook for SK hynix's third-quarter results to be announced at the end of this month. SK hynix has maintained the strongest profitability among global memory chipmakers throughout the year, leveraging its overwhelming edge in the HBM market. Even in the second quarter, when competitors one after another posted earnings shocks, SK hynix set a new record with operating profit in the 9 trillion won range.
Securities firms had initially estimated SK hynix's third-quarter operating profit at between 10 trillion won and 11 trillion won. The previous consensus was also the largest quarterly operating profit since SK hynix was founded. With Samsung Electronics' preliminary results confirming a boom in the commodity DRAM and NAND flash markets, experts are now moving to raise their outlooks for SK hynix's results one after another.
Park Yu-ak, an analyst at Kiwoom Securities, said, "We judge that the price increases for commodity DRAM and NAND will be larger than initially expected," and added, "In the case of PC DRAM, lower inventories and higher price premiums led to a price increase rate that far exceeded market expectations." Kiwoom Securities' analysis put the PC DRAM price increase at 20% to 30% quarter over quarter.
Samsung Electronics disclosed on the 14th that it recorded sales of 86 trillion won and operating profit of 12.1 trillion won in the third quarter of this year. Those figures were up 8.7% and 31.8%, respectively, from a year earlier. This is the first time Samsung Electronics has exceeded 80 trillion won in quarterly sales, and the operating profit is the highest since the second quarter of 2022 (14.1 trillion won). The results also topped the previous market forecast by nearly 2 trillion won.
Given this trend, many securities firms have recently raised their outlooks for SK hynix's results. Kiwoom Securities lifted its operating profit forecast from 11.6 trillion won to 12.3 trillion won, and Heungkuk Securities also revised its estimate from 10.9 trillion won to 11.6 trillion won. Son In-jun, an analyst at Heungkuk Securities, said, "In addition to HBM, where sales increased, DRAM and NAND reflecting stronger-than-expected pricing will drive an earnings surprise."
The industry observed that starting in the third quarter, prices began to fall for one of SK hynix's biggest revenue sources, the fifth-generation HBM (HBM3E) 12-high product, and that there is a possibility of further declines in the fourth quarter, but profitability remains solid. A semiconductor industry official said, "As HBM3E transitions to the next-generation HBM4 (sixth-generation HBM), the profitability decline will be offset," and added, "With the added benefit of rising commodity DRAM prices, the market environment remains favorable for SK hynix."
According to market research firm Counterpoint Research, SK hynix's global HBM market share reached about 60% as of the second quarter of this year. The increase in HBM shipments for AI servers has continued into the third quarter. Chae Min-suk, an analyst at Korea Investment & Securities, said, "SK hynix's HBM revenue will exceed its third-quarter plan."