Q3 Operating Profit Reaches 107.4 Trillion Won… Led by Memory, Next Year's Outlook Also Bright

Samsung Electronics has ushered in the era of a 100 trillion won quarterly operating profit.

A quarterly operating profit of 100 trillion won is a record that has not been achieved not only by domestic companies but also by major global big tech companies such as Apple and Nvidia. Only Saudi Arabia's state-owned enterprise Aramco recorded $86.5 billion (approximately 116 trillion won) in the second quarter of 2022 during the Ukraine war.

Samsung Electronics announced on the 8th that its consolidated operating profit for the third quarter of this year was provisionally tallied at 107.4 trillion won, a 782.5% increase from the same period last year. Revenue rose 126.6% year-on-year to 195 trillion won.

Consequently, Samsung Electronics has broken its all-time record for revenue and operating profit for four consecutive quarters, following the previous record-breaking results in the fourth quarter of last year with 93.8 trillion won in revenue and 20.1 trillion won in operating profit.

The operating profit for this single quarter alone is close to 2.5 times its entire annual profit last year (43.6 trillion won).

Cumulative operating profit up to the third quarter of this year stands at around 254.1 trillion won. This makes it highly likely that annual operating profit for this year will exceed 350 trillion won.

On this day, Samsung Electronics did not disclose its performance by division or business unit. However, it is analyzed that the Device Solutions (DS) division, particularly the memory business unit, single-handedly drove the company's overall performance this quarter as well.

This is because the global AI hegemony race continues to drive steady growth in demand for memory semiconductors, which are essential for AI infrastructure.

In fact, the upward trend in DRAM and NAND flash prices driven by memory shortages continued into the third quarter.

According to a survey by market research firm DRAMeexchange, the average price of PC DRAM in September was $26, up $1 from the previous month to hit an all-time high. The average price of NAND flash memory for memory cards and USBs rose $0.1 from the previous month to $30.6, increasing for the 21st consecutive month.

This trend is expected to continue into the fourth quarter, with market researcher TrendForce predicting that general-purpose DRAM prices will rise 10 to 15%, and NAND prices 15 to 20% compared to the previous quarter.

In the securities industry, it is estimated that the operating profit of Samsung Electronics' DS division was similar to or slightly higher than the company's total operating profit. However, non-memory business units within the DS division, such as System LSI and Foundry, are projected to have continued losses of around 1 trillion won.

Specifically, it is estimated that the DRAM business achieved nearly 80 trillion won and the NAND business nearly 30 trillion won in operating profit.

With DRAM operating profit margin estimated at around 80% and NAND at 70 to 75%, the memory operating profit margin is estimated to be in the 70% range.

Meanwhile, the performance of Samsung Electronics' DS division next year is projected to be even better than this year. This is because demand for Samsung's flagship memory semiconductors is expected to continue, and HBM4, which began mass production for the first time globally this year, is scheduled to be supplied in full swing starting next year.

On the other hand, the Device eXperience (DX) division, which handles mobile phones and home appliances, is analyzed to have suffered its second consecutive quarter of deficits—the first in its history—due to rising costs from soaring component prices.

In other words, the rise in prices of semiconductors including memory is acting as a burden on finished product businesses.

[ⓒ Global Economic Times. 무단전재-재배포 금지]