The Return of the Semiconductor Era: DS Division Reclaims Its Role as Samsung's Core Business

Samsung Electronics' Surprise Q3 Results
DS Division's Operating Profit Nears 7 Trillion Won
Memory Price Hikes, Including DRAM, Drive Recovery
378% Surge in 10 Months Sets New High
Experts Expect Momentum to Continue in Q4
Rising HBM Demand Seen as Additional Boost

Samsung Electronics' unexpected third-quarter results are being interpreted as a sign that the semiconductor market has entered a boom phase. The Device Solutions (DS) division, which had been struggling, has recovered its profitability and is once again being recognized as a core business pillar. Recently, as memory prices have risen, inventory adjustments are nearing completion, and the spread of artificial intelligence (AI) is restructuring demand around data centers and high-bandwidth memory (HBM). Samsung's improved performance suggests that semiconductors have become the foundational infrastructure of the AI era.

Samsung Electronics Pyeongtaek Campus. Photo by Kim Hyunmin

In the securities industry, it is estimated that more than half of Samsung Electronics' 12.1 trillion won operating profit in the third quarter came from semiconductors. The operating profit of the Samsung Electronics DS division is believed to have approached 7 trillion won.

The recovery in semiconductors is largely due to rising memory prices, such as DRAM. According to market research firm DRAMeXchange, on October 13 (local time), the average spot price of DDR4 8Gb (1Gx8) 3200, a representative standard DRAM, reached $7.004, marking the highest point of the year. Compared to $1.464 on January 2, this is a 378.4% increase in just ten months. The "average contract price," which is calculated monthly, is also likely to reach its annual peak this month. The next-generation DDR5 16Gb (4800, 5600) has seen its spot price rise to $8.867. Despite the price increases, demand remains robust. DRAM continues to be a key memory component in AI-enabled PCs and smartphones, and demand remains high in HBM and AI data centers as well.

The market's attention is now focused on whether Samsung Electronics can maintain its strong semiconductor performance in the fourth quarter. Experts predict that the upward trend will continue for the time being, citing many positive factors in HBM and foundry. Some securities analysts forecast that the operating profit of the Samsung DS division in the fourth quarter could reach 8.3 trillion won. Park Yuak, an analyst at Kiwoom Securities, noted, "The fourth quarter could bring a series of positive news for Samsung, such as the quality testing and mass production of HBM4 (6th generation HBM) and the acquisition of new foundry (semiconductor contract manufacturing) customers."

Samsung Electronics is developing HBM4 using the more advanced "1c (1-nanometer class, 4th generation) process" and is preparing for mass production by providing samples to major clients such as Nvidia. With Nvidia expected to launch its next-generation AI accelerator "Rubin" next year, there is a strong possibility that demand for HBM will increase significantly, presenting new opportunities for Samsung.

Expectations for the foundry business are also high. Many analysts believe that additional orders are likely in the fourth quarter, following the third quarter. In July, Samsung Foundry secured an opportunity to escape from deficit by signing a contract with Tesla to produce AI chips worth about 22 trillion won. The company has also signed a contract with Apple to manufacture image sensors and is expediting preparations for mass production. As Samsung is rushing to complete its second plant in Taylor, Texas, following its Austin facility, expectations are rising that the foundry business will further contribute to Samsung's performance. Kim Hyungtae, a senior researcher at Shinhan Investment Corp., said, "The recovery of foundry utilization rates and the securing of large-scale long-term contracts are expected to continue reducing losses," adding, "There will also be AI-driven benefits in the second half, centered on HBM and enterprise SSD (eSSD)."

Samsung Electronics Seocho Building in Seoul. Photo by Kang Jinhyung aymsdream@

However, the intensifying US-China trade conflict is cited as a risk factor. If the conflict escalates, it could shake the global financial markets and increase exchange rate volatility. Tariff issues also remain. While US President Trump has repeatedly mentioned imposing tariffs on Chinese semiconductors, the specific timing and method remain unclear. The industry is maintaining a state of constant readiness for unexpected measures. There are significant concerns that if broad tariffs are imposed on memory products such as DRAM and HBM supplied to US customers, Samsung could suffer substantial damage.

An industry official said, "The US-China summit, which is expected to take place at the Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju at the end of this month, could become a turning point in the trade conflict," adding, "The outcome may also impact Samsung's future performance."

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