The institution stated that Samsung Semiconductor will break even in the first quarter of this year, and SK Hynix, which successfully turned losses into profits in the last quarter of last year, is expected to further improve its performance, triggering expectations for a “semiconductor spring” this year.
The compilation results of securities companies’ performance forecasts (consensus) within the last month show that Samsung Electronics’ consolidated operating profit for the first quarter of this year is expected to be 4.92 trillion Korean won. This is 7.7 times higher than the operating profit of 640.2 billion Korean won in the first quarter of last year and 1.7 times higher than the operating profit of 2.8257 trillion Korean won in the last quarter of last year.
The growth in operating profit is expected to be driven by improvements in the performance of the Device Solutions (DS) division, which is responsible for the semiconductor business.
The DS division had an annual deficit of 14.88 trillion Korean won last year. However, with the effects of memory production reduction becoming apparent, and the increase in demand for AI servers and chips, DRAM and NAND prices are expected to rise, leading to a surplus in the first quarter of this year.
Meritz Securities expects the DS division’s operating profit to be 700 billion Korean won, IBK Investment & Securities at 334 billion Korean won, and KB Securities at 200 billion Korean won.
Due to the industry’s recovery, Samsung Electronics’ DRAM production, which has been reducing memory output, will soon return to last year’s levels.
Samsung Electronics had a 45.7% market share in DRAM in the fourth quarter of last year, maintaining first place and reaching the highest level since the third quarter of 2016 (48.2%).
The growth in sales of high-value-added products like DDR5 played a certain role.
In the first quarter of this year, the storage division, including DRAM and NAND, is expected to achieve profitability and improve performance.
Omdia’s report shows that Samsung Electronics’ DRAM wafer production in the second quarter of this year is 1.785 million pieces, close to the 1.899 million pieces in the second quarter of 2023, and 1.965 million pieces in the third quarter, exceeding the 1.77 million pieces in the third quarter of last year.
SK Hynix previously had an operating profit of 346 billion Korean won in the fourth quarter of last year, avoiding deficits for four consecutive quarters.
Currently, the consensus for SK Hynix’s operating profit in the first quarter is 1.27 trillion Korean won. The increased demand for high bandwidth memory (HBM) from AI is a significant positive factor. SK Hynix is the largest HBM supplier for Nvidia, an AI chip leader.
In this context, SK Group’s chairman Choi Tae-won has started to personally oversee the HBM business this year, hosting monthly meetings attended by SK Hynix executives.
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