Samsung Semiconductor Accelerates H2 Performance Improvement with 'High-Value Memory'

DS Division Posts Operating Loss in Q2 Following Q1
Reduces Deficit Mainly Through HBM and DDR5 DRAM

Improved Performance Expected in Second Half with High-Value Product Portfolio
Market Analysts Forecast DS Division to Return to Profit in Q4

Samsung Electronics posted a loss of 8.94 trillion KRW in its semiconductor business in the first half of the year. This clearly reflects the sluggish semiconductor market conditions. In the second half, the company plans to improve profitability by building a portfolio focused on high-value memory products such as High Bandwidth Memory (HBM) and Double Data Rate (DDR)5 DRAM.

Samsung Electronics recorded an operating loss of 4.36 trillion KRW in the DS division in the second quarter, but reduced the deficit compared to the first quarter (4.58 trillion KRW). Although system semiconductors (System LSI + foundry) performed poorly, shipments of high-value DRAM such as HBM and DDR5 increased compared to the previous quarter. Memory inventory peaked in May and has since started to decline.

The situation could improve further in the second half. There are forecasts for a recovery in the memory market, which accounts for 60% of DS division sales. The effect of production cuts in the memory industry will be fully realized in the third quarter, and inventory is expected to gradually decrease, centered on high-value DRAM. The company explained that market recovery could occur across all applications, including mobile, PC, and servers.

Samsung Electronics plans to optimize its portfolio around high-value products to boost memory performance in the second half. It will increase advanced DRAM products such as ▲DDR5 ▲Low Power (LP) DDR5X ▲HBM in high-performance servers and premium mobile sectors, and expand the proportion of advanced NAND processes such as V7 and V8. In particular, with the rapid surge in generative AI demand, the company is focusing on expanding its HBM business, which is used together with Graphics Processing Units (GPU).

Samsung Electronics has completed preparations for mass production by showcasing samples of its 4th generation HBM products, HBM3 16GB and 24GB. Industry insiders expect Samsung to establish a full-scale mass production system within the year by supplying HBM3 to GPU companies such as AMD. The 5th generation HBM3P is expected to be released in the second half, and 6th generation mass production could be possible next year.

The market expects Samsung Electronics to turn profitable within the year, focusing on high-value DRAM such as HBM3 and DDR5. SK Securities predicted that Samsung could return to profitability in the DRAM business in the fourth quarter. KB Securities also forecasted a full profitability turnaround for the entire DS division in the fourth quarter. They also projected that the proportion of HBM in Samsung’s DRAM sales could increase from 6% this year to 18% next year.

Global credit rating agency Standard & Poor’s (S&P) expressed optimism about Samsung Electronics’ performance recovery centered on memory in the second half when announcing its credit rating on the 25th. Market research firm Mordor Intelligence projected that the HBM market could grow from $2 billion this year to $6.3 billion by 2028, with an average annual growth rate of 25.4%.

This content was produced with the assistance of AI translation services.