Samsung's expected 108 trillion won quarter rests on chip margins above 70%
Samsung Electronics is expected to post 108.1 trillion won of third-quarter operating profit, nearly nine times last year's, in guidance due Thursday. With foundry, chip design and phones all losing money, that figure now moves with memory prices and the won.
The Investor · Invest desk
What happened
- Thirteen of the 17 analysts tracked by FnGuide now sit below 110 trillion won after cutting for the stronger won, and the four above that published in July.
- The estimate would beat the second-quarter records of 89.4 trillion won in operating profit on 171.5 trillion won of sales.
- Industry estimates put the chip division's third-quarter operating margin at 72-75%, with DRAM alone possibly above 80%.
- Samsung's share of high-bandwidth memory rose to 33% in the second quarter from 21% in the first, according to Counterpoint Research.
Why it matters
- Who's exposed exposure Chip sales are mostly priced in dollars but booked in won, so the 40-won cut in analysts' rate assumption takes about 2.8% off the won value of each dollar of memory Samsung sells.
- What it costs cost Bonus provisions tied to operating profit start next year, so every record quarter raises a cost that grows with the profit, with chip-division staff first in line for payouts.
- Who has to decide decision Until new lines open in 2027, each wafer Samsung moves to HBM is taken from the commodity DRAM that Kiwoom says has driven its earnings so far.
Next story · Invest · Oct 7
Samsung turned 87% of its added sales into profit in a record 107.4 trillion won quarterConfirmed18 publishers
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 [11]. Against that, the Device Experience division's 800 billion won loss [13] came to about 0.9% [24].
The chip margins explain the concentration. The chip division's estimated 72-75% [3] 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 [16], a margin of about 82% [25]. Samsung as a whole earned 52.1% in the second quarter [22], and the consensus implies 53.6% for the third [23]. The gap comes from foundry and System LSI, both expected to stay in the red [12], plus the phone and appliance loss. Han Jin-man, who runs the foundry, has cited 2028 as the target for a return to profit [12].
Which memory matters is a separate question. The AI case rests on high-bandwidth memory, where Samsung is gaining share from second place [4][6]. 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 [14]. He expects the price surge to cool in the fourth quarter as Samsung competes for share with China's CXMT and YMTC [15].
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 [17]. 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 [20]. New lines at Samsung, SK hynix and Micron are not expected before 2027 [20].
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 [5]. The Korea Herald put it at 108.1 trillion as of Monday [1], 1.16 trillion won higher [18]. Some analysts cut their forecasts for the stronger won and for a bonus provision [9]. "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 [8]. Chip orders are mostly placed from overseas and sold in dollars, with earnings reported in won [10].
A guidance figure above 110 trillion won would mean the four estimates published in July were right [7] 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 [14], since that would mean HBM contracts are already carrying the growth.
What to watch
- Fourth-quarter commodity DRAM and NAND contract prices, measured against Kiwoom's forecast gains of 3% and 12%.
- Whether Samsung's HBM4 ships in Nvidia's Vera Rubin accelerator in the second half as slated, its route to narrowing SK hynix's 50% HBM share.
- The won-dollar rate relative to the 1,400 won assumption analysts have moved to.
Information, not investment advice. This story is general information about companies and markets, drawn from cited reporting. It is not a recommendation to buy, sell or hold any security; check the cited sources before acting.
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- [1]
Samsung Electronics is expected to report third-quarter operating profit of 108.1 trillion won, up nearly ninefold from a year earlier, on revenue of 201.7 trillion won, according to brokerage estimates compiled by FnGuide as of Monday.
- [2]
Samsung's preliminary third-quarter earnings result is set for Oct. 8.
- [3]
Samsung's Device Solutions division, which oversees its semiconductor business, is expected to post a third-quarter operating margin of 72-75 percent according to industry estimates; its DRAM business could post a margin exceeding 80 percent.
- [4]
Samsung's share of the HBM market rose to 33 percent in the second quarter from 21 percent in the first, according to Counterpoint Research; its HBM4 chips are slated for use in Nvidia's Vera Rubin accelerator in the second half.
- [5]
The FnGuide consensus for Samsung's July-September operating profit stood at 106.94 trillion won, with revenue of 200.77 trillion won, as of Friday.
- [6]
In HBM, Samsung ranked second with a 33 percent share, behind SK hynix at 50 percent.
- [7]
The won's rise led 13 of the 17 analysts tracked by FnGuide to put their Samsung estimates below 110 trillion won; the other four, with higher figures, published their projections in July.
- [8]
"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,"
- [9]
Some analysts at local brokerages lowered their Samsung forecasts because of the won's appreciation and a bonus provision.
- [10]
Samsung's chip orders are mostly placed from overseas and largely sold in dollars, with earnings reported in won.
- [11]
In the second quarter Samsung posted record sales of 171.5 trillion won and operating profit of 89.4 trillion won.
- [12]
Samsung's foundry and System LSI businesses are expected to remain in the red in the third quarter; foundry head Han Jin-man has cited 2028 as the target for a return to profitability.
- [13]
Samsung's Device Experience division, in charge of appliances and mobile devices, posted an operating loss of 800 billion won in the second quarter and is expected to report a wider loss as demand stagnates and costs rise.
- [14]
"Prices for commodity dynamic random-access memory [DRAM] and NAND, which have driven the company's overall earnings so far, are expected to rise only 3 percent and 12 percent from the previous quarter, respectively, as customers push back on higher prices and consumer demand stays weak,"
- [15]
Park Yu-ak of Kiwoom Securities expects the price surge to cool in the fourth quarter, with downward pressure on commodity memory prices as Samsung competes for share with Chinese rivals CXMT and YMTC.
- [16]
Micron posted fiscal fourth-quarter revenue of $54.23 billion and adjusted operating profit of $44.64 billion.
- [17]
"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,"
- [18]
The two reported FnGuide consensus figures differ by 1.16 trillion won.
- [19]
Lowering the won-dollar assumption from 1,440 to 1,400 cuts the won value of each dollar of sales by about 2.8%.
- [20]
Samsung is expected to keep allocating more wafer capacity to HBM and has projected HBM will account for more than one-third of global DRAM wafer capacity in 2027; new lines at Samsung, SK hynix and Micron are not expected to come online before 2027.
- [21]
From next year Samsung will set aside provisions for bonuses in proportion to its operating profit, and semiconductor division employees are set to receive payouts next year.
- [22]
Samsung's second-quarter operating margin was about 52.1%.
- [23]
The FnGuide consensus implies a third-quarter operating margin of about 53.6%.
- [24]
The Device Experience division's second-quarter loss equalled about 0.9% of group operating profit.
- [25]
Micron's fiscal fourth-quarter adjusted operating margin was about 82%.
Sources
6 independent publishers whose own reporting we read for this story.
- bbc.comAI chip boom pushes Samsung profits to record $80bn
1 article · October 7, 2026
- channelnewsasia.comSamsung's Q3 profit seen jumping nine-fold, but chip margins may be flat
1 article · October 6, 2026
- cryptobriefing.comSamsung Electronics expected to post nine-fold Q3 profit jump on AI demand
1 article · October 6, 2026
- koreaherald.comSamsung set for record W100tr quarterly profit on memory boom
2 articles · October 6, 2026
- koreajoongangdaily.comSamsung heads for 100 trillion won profit milestone in Q3, but stronger won may limit upside surprise
1 article · October 2, 2026
- mezha.netПрибуток Samsung може зрости майже в дев’ять разів попри тиск на маржу
2 articles · October 8, 2026
- techspot.comMemory crisis puts Samsung on track for the biggest quarterly operating profit in tech history
1 article · October 8, 2026
Topics and entities
Topics
- Memory Chip Pricing
- Korean won exchange rate
- High-Bandwidth Memory