[DigitalToday reporter Daegeon Seok] Samsung Electronics and SK Hynix are expected to post combined operating profit of around 150 trillion won in the second quarter, setting new record quarterly results side by side. Samsung Electronics announced preliminary operating profit of 89.4 trillion won. SK Hynix is expected to post operating profit in the 60 trillion won range. The brokerage industry expects results at both companies to strengthen further in the second half.

Samsung Electronics’ second-quarter operating profit of 89.4 trillion won is up 56 percent from the first quarter. The figure is a companywide preliminary result covering DS (semiconductors) and DX (devices). It came even while carrying non-memory business lines that are in the red. Business division results will be disclosed in the final earnings later this month. Brokerage estimates show most of the companywide profit came from memory. Hana Securities estimates memory operating profit at 91 trillion won and a 2 trillion won loss in non-memory (system semiconductors). Daishin Securities also put non-memory losses at 2.3 trillion won, MX losses at 1 trillion won and home appliances (CE/VD) losses at 0.1 trillion won.

The result also came after reflecting a large provision for performance bonuses. The size of the bonuses paid by the company is estimated at the mid-to-late teens of trillions of won. Hana Securities analysed that, before reflecting the provision, memory operating profit alone would likely have exceeded 100 trillion won. Daishin Securities estimated that excluding the bonus provision, memory operating profit would have reached 109 trillion won.

SK Hynix’s second-quarter operating profit is seen at 61 trillion won to 67 trillion won. IBK Investment & Securities suggested 61 trillion won, while Hana Securities put it at 67.6 trillion won. With a high share of HBM sales, price gains for general DRAM were smaller than at rivals. But an analysis said it maintained high profitability through a product mix centred on HBM, high-spec DRAM and enterprise SSDs (eSSD). According to IBK Investment & Securities, SK Hynix’s DRAM operating margin is estimated to be as high as 80 percent.

A key point is that these results are not the peak. Hana Securities forecast that memory shortages will continue in the second half and stronger-than-expected price momentum will persist. It expects shortages to deepen, centred on LPDDR, as Nvidia’s Vera Rubin shipments begin. It said Chinese companies with weak cost structures are cutting volumes, but Nvidia’s purchases are offsetting that.

Another view is that the results at the two memory leaders are difficult to see as a simple semiconductor boom. The view is that memory is being reassessed from a cyclical industry that rises and falls with the economy into a structurally growing industry. IBK Investment & Securities said demand for memory is rising sharply as artificial intelligence evolves into an agent format.

Agent AI uses 10,000 times more tokens than generative AI. As CPU-centred tasks such as tool use and code inspection increase, DRAM demand is also rising. NAND demand is also growing to secure KV cache. IBK Investment & Securities explained that if tokens double, the memory required increases fourfold. Jensen Huang, Nvidia’s chief executive officer, also raised his forecast for the AI chip market from $500 billion last year to more than $1 trillion this year.

Amid these structural changes, the two companies are even facing calls for a valuation reassessment. IBK Investment & Securities said SK Hynix shares trade at about 8 times price-to-earnings based on expected 2026 results, and it is difficult to justify a low valuation by viewing as cyclical an industry expected to grow tenfold over seven years. It also cited SK Hynix starting trading of its American depositary receipts on the U.S. Nasdaq on July 10 as a factor in a valuation reassessment.

HBM4 set to ramp up in second half, companies’ strategies diverge

Even amid the same boom, the two companies’ strategies diverge. Daishin Securities said Samsung Electronics focused on maximising profit through an aggressive price-hike policy during supply constraints. It said second-quarter DRAM sales volume rose 10 percent from the previous quarter, beating guidance, and led the industry’s highest DRAM price increase.

As the bonus provision burden was large, Daishin Securities also pointed to the possibility that Samsung Electronics could resume share buybacks for employee compensation as a factor supporting the downside of the stock price. In non-memory, expectations continue for new orders in ASICs, automotive chips and mobile application processors (AP). SK Hynix, meanwhile, placed weight on securing stable profitability through a high-spec mix centred on HBM and eSSD.

The variable is the second half. HBM4 volumes are expected to ramp up from the third quarter. IBK Investment & Securities estimated that initial HBM4 profitability will be lower than HBM3E, but said the impact on DRAM operating margins will be limited because the volume share will be lower than expected. For Samsung Electronics, entering HBM4 is key to a rebound in results. IBK Investment & Securities expects Samsung’s HBM to contribute to top-line growth from the third quarter, when HBM4 volumes ramp up.

Price negotiations for HBM in 2027 are another remaining axis. Daishin Securities forecast that Samsung Electronics’ 2027 HBM average selling price will rise 91 percent from the previous year. As general DRAM prices have risen about fourfold in a year, talks are reported to be under way on raising HBM prices to reflect that. The direction ultimately depends on how much price advantage the two companies secure in the negotiations. Observers say the balance of the duopoly could shift again depending on how HBM4 settles in the second half and the outcome of price negotiations.