KOSPISemiconductors005930

Samsung Electronics

₩276,000 0.00%2026-10-02 close

Market Cap

₩1,613.6T

Turnover

₩3.1T

Volume

11.4M

Shares out.

5.85B

PER

11.3×

PBR

3.0×

EPS

₩22,626

Dividend Yield

0.65%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩1,668 per share · Prices as of the 2026-10-02 close

Report overview

Record Profit, With Chip Concentration as the Variable

A surge in AI memory pricing has pushed quarterly revenue and operating profit to record levels, while at the same time exposing a structure in which nearly all profit comes from a single semiconductor division.

1
In Q2 2026 revenue reached KRW 171.4995tn and operating profit KRW 89.4924tn, both quarterly records, with the operating margin rising to about 52.2%.
2
On the Q2 2026 earnings call the company guided that Q3 HBM4 revenue would more than triple quarter on quarter and that HBM4 would exceed 60% of total HBM revenue in the second half.
3
DS (semiconductors) accounted for 99.7% of Q2 2026 operating profit, while the DX division posted its first quarterly operating loss since the division was created.
4
On August 21, 2026 the board approved a 2026 shareholder return program estimated at KRW 90tn-110tn, plus about KRW 15tn of treasury share purchases for employee compensation.
5
Views on the memory cycle diverge, with some arguing shortages persist into 2027-2028 while others warn of price declines from Chinese capacity additions and slowing investment.

Business structure

Samsung Electronics is a diversified electronics group spanning the DS division (semiconductors), the DX division (smartphones, TVs, home appliances) and affiliates such as Samsung Display and Harman.

DS covers memory (DRAM and NAND), System LSI and Foundry, and in Q2 2026 DS operating profit was KRW 89.2tn, roughly 99.7% of company-wide operating profit.

In memory, the company said it focused on server products where agentic AI drove strong demand, delivered a record quarter, expanded HBM4 supply and shipped the industry's first HBM4E samples.

In NAND, management guided that server SSDs would exceed 60% of its NAND revenue this year, and it said multi-year contracts with major customers had improved medium-term visibility.

System LSI achieved record first-half revenue on mobile SoC and sensor sales despite broadly weaker demand, while Foundry saw revenue rise on HBM base dies and demand from customers in the Americas.

Structurally, Samsung applies its sixth-generation 10nm-class (1c) DRAM process to HBM4 and sources the base die from its own 4nm foundry process, giving it a different supply chain from rivals.

End customers are AI accelerator vendors: HBM4 is cited as memory for next-generation accelerators including Nvidia Vera Rubin and AMD MI450, while in foundry the company said it won a 2nm high-performance computing order from a large US customer, identified by supply-chain sources as a Tesla AI chip.

By contrast, DX faces a structure where revenue grew year on year on solid Galaxy S26 and A-series sales but operating profit fell on rising component costs. The competitive axes are SK hynix and Micron in memory, and closing the gap with TSMC in foundry.

Earnings trend

Quarterly revenue · Operating profit

₩74.6T₩4.7T25Q2₩86.1T₩12.2T25Q3₩93.8T₩20.1T25Q4₩133.9T₩57.2T26Q1₩171.5T₩89.5T26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩302.2T₩43.4T2022₩258.9T₩6.6T2023₩300.9T₩32.7T2024₩333.6T₩43.6T2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩74.6T	₩4.7T	6.3%
2025Q3	₩86.1T	₩12.2T	14.1%
2025Q4	₩93.8T	₩20.1T	21.4%
2026Q1	₩133.9T	₩57.2T	42.8%
2026Q2	₩171.5T	₩89.5T	52.2%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩302.2T	₩43.4T	₩54.7T	14.4%	15.9%	26.4%
2023	₩258.9T	₩6.6T	₩14.5T	2.5%	4.1%	25.4%
2024	₩300.9T	₩32.7T	₩33.6T	10.9%	8.6%	27.9%
2025	₩333.6T	₩43.6T	₩44.3T	13.1%	10.4%	29.9%

Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04

Earnings analysis

On an annual basis, revenue of KRW 302.2314tn and operating profit of KRW 43.3766tn (14.4% margin) in 2022 collapsed to KRW 258.9355tn and KRW 6.5670tn (2.5%) in 2023, then recovered to KRW 300.8709tn and KRW 32.7260tn (10.9%) in 2024 and KRW 333.6059tn and KRW 43.6011tn (13.1%) in 2025.

In 2025, net profit attributable to owners was KRW 44.2610tn and operating cash flow reached KRW 85.3151tn, roughly double the 2023 level of KRW 44.1374tn, while the debt-to-equity ratio stayed low at 29.9%. The quarterly slope is even steeper.

From revenue of KRW 74.5663tn and operating profit of KRW 4.6761tn (about 6.3% margin) in Q2 2025, the figures rose to KRW 86.0617tn and KRW 12.1661tn in Q3 2025 and KRW 93.8374tn and KRW 20.0737tn in Q4 2025.

They then reached KRW 133.8734tn and KRW 57.2328tn (about 42.8%) in Q1 2026 and KRW 171.4995tn and KRW 89.4924tn (about 52.2%) in Q2 2026, meaning revenue more than doubled and operating profit rose more than tenfold in four quarters.

Pricing was the direct driver: the company said Q2 average selling prices rose by a mid-40% range for DRAM and a high-60% range for NAND quarter on quarter, while DRAM bit shipments grew by a low-teens percentage, above guidance, and NAND bit shipments rose by a low single digit, in line with guidance.

Net profit attributable to owners of KRW 71.2695tn in Q2 2026 sits well below operating profit, reflecting tax and non-operating items, so bottom-line growth was more moderate than at the operating line.

On profit mix, DX recorded an operating loss of KRW 0.8tn, its first quarterly loss since the division was formed in 2021, and on costs, management said on the Q1 call that bonus provisions were still under labor-management discussion, were not booked in Q1, and that Q2 recognition would depend on the outcome - a variable to keep in mind when comparing quarters.

Industry analysis

The memory cycle is in an upswing driven by AI server investment. SigmaIntell projected the global DRAM supply-demand balance to swing from an 8% surplus in 2025 to a 12% shortage in 2026, and it expected HBM to exceed 20% of global DRAM wafer capacity this year.

With HBM absorbing leading-edge capacity, commodity products have paradoxically tightened. On June 26, 2026, Hanwha Investment & Securities forecast Q3 commodity DRAM prices up 15-25% and NAND up 20-25% quarter on quarter, more than double the March market estimates.

It also argued that ramps at Samsung's Pyeongtaek P4L and SK hynix's Cheongju M15X are geared mainly to HBM demand, so commodity DRAM tightness is unlikely to ease quickly. Competitive positioning is shifting through the generational change.

Counterpoint Research put revenue-based HBM share in Q3 2025 at 57% for SK hynix versus 22% for Samsung, a 35 percentage point gap.

In HBM4, by contrast, Samsung is reported to be the only supplier producing a 13Gb-per-second HBM4, while SK hynix and Micron officially cite 11.7Gb, and the company guided that its HBM share would match its overall DRAM market share during the second half. Interpretations of the cycle's position differ.

Kyung Kye-hyun, an adviser to Samsung Electronics, said aggressive Chinese capacity expansion could sharply increase supply from the second half of 2026 or the first half of 2028 and push memory prices down.

Outlook

Management's stated direction is a stronger AI memory mix in the second half. The company guided that Q3 HBM4 revenue would more than triple quarter on quarter and that HBM4 would comfortably exceed 60% of total HBM revenue in the second half.

Memory plans to expand sales of HBM4 including high-performance HBM4E, DDR5, SOCAMM2 and eSSD, while Foundry intends to begin mass production of second-generation 2nm for mobile and widen leading-edge and AI/HPC order wins.

On utilization and orders, the Q2 call said leading-edge capacity additions are not keeping up with demand, utilization at 8nm and below is at maximum levels, and the number of 2nm design wins this year is expected to more than double year on year.

On capex, Q2 spending rose KRW 5.5tn quarter on quarter to KRW 16.8tn as Pyeongtaek new-line infrastructure and the Taylor fab in the US moved into full investment.

For longer-term sites, the company said Taylor Fab 1 remains on track for 2026 operational readiness, Taylor Fab 2 is being prepared for construction start late this year targeting 2030 mass production, and additional fabs are under review as 1.4nm customer inquiries increase.

Domestically, reports indicated the cleanroom schedule for the six-phase Pyeongtaek P5 was pulled forward amid supply-demand imbalance and that part of the line would be set up for NAND.

For demand visibility, the company outlined expanding long-term supply agreements with major global data center and AI customers in anticipation of prolonged memory shortages.

For DX, however, it said a difficult operating environment is expected to persist on global uncertainty and higher component costs, so it will pursue competitiveness and structural improvement together.

Valuation

PER

11.3×

PBR

3.0×

ROE

31.4%

EPS

₩22,626

BPS

₩85,688

Dividend per share

₩1,668

Because profit over the most recent four quarters is far larger than in past periods, the earnings-based multiple sits toward the lower part of the band in which Samsung Electronics has typically traded (broadly the 10-20x area), while the multiple against net assets sits at a premium.

The two metrics pointing in different directions is typical of a cycle phase in which earnings have surged quickly, and it is worth noting that an earnings multiple can rise again if the denominator shrinks when the cycle turns.

Dividend yield looks modest if only the regular dividend is counted, but the company said it will pay roughly KRW 30tn in cash dividends including the regular Q3 dividend, with details to be fixed at the late-October board meeting and the remaining return decided in method and size at the January board meeting, so the perceived level may change once actual amounts are confirmed.

The net-asset multiple can be displayed differently depending on the calculation basis (in-house versus exchange-published figures), so the basis should be checked when comparing.

Brokerage views diverge: Nomura reaffirmed a target price of KRW 670,000 and a Buy rating on July 31, 2026, citing the likelihood of continued shortage conditions in 2027-2028 and the shareholder return policy.

Korea Investment & Securities was reported in early August 2026 to have raised its target price by 10% to KRW 650,000 while other houses were cutting. These are figures presented by those institutions and are not the judgment of this report.

PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-09-04

Bull factors

Memory Profits Lifted by Both Price and Mix

The Q2 2026 operating margin of about 52.2% is a completely different level of profitability from 2.5% in full-year 2023, 10.9% in 2024 and 13.1% in 2025. Behind it were quarter-on-quarter price increases in the mid-40% range for DRAM and the high-60% range for NAND.

Management also said that as agentic AI spreads, server SSD demand is rising across AI servers, general compute servers and key-value cache storage servers, reshaping NAND into a higher-value business. While pricing holds, fixed-cost leverage works strongly in favor of margins.

A Changed Position in the HBM4 Transition

In the HBM3E generation, Samsung was seen as having missed early benefits from top AI customers after failing Nvidia's qualification, but the company achieved HBM4 mass production and commercial shipment in February 2026.

It then delivered the industry's first 12-high HBM4E samples to major customers on May 29, combining its 1c process with an in-house 4nm logic base die for pin speeds up to 16Gbps and 3.6TB/s of bandwidth.

On the Q1 call, management said prepared HBM4 capacity was fully sold out as customer demand concentrated on the product. The question is whether qualification during the generational shift converts into actual volume.

Shareholder Returns Approved at a Record Scale

On August 21, 2026 the board approved a 2026 shareholder return program estimated at KRW 90tn-110tn, about five times the previous record of KRW 20.3tn in 2020.

It follows the 2024-2026 policy of returning 50% of free cash flow; in 2024-2025 the company paid KRW 9.8tn of regular dividends each year, and in 2025 it executed KRW 1.3tn of special dividends and KRW 8.4tn of buybacks and cancellations.

The same board meeting also approved about KRW 15tn of treasury share purchases for employee compensation. On the cash-flow base that funds this, operating cash flow was KRW 85.3151tn in 2025.

Bear factors

Profit Concentrated in One Division

In Q2 2026, DS operating profit of KRW 89.2tn was about 99.7% of the company total, while DX posted an operating loss of KRW 0.8tn, its first quarterly loss since the division was formed in 2021. That concentration also means company-wide results follow memory prices directly when they change direction.

The history of annual operating profit falling to KRW 6.5670tn in 2023 shows how far group profit can compress during a memory downturn. For now, the finished-goods business is structurally unable to cushion earnings.

Capacity Additions and a Price-Slowdown Scenario

Kyung Kye-hyun, an adviser to Samsung Electronics, flagged the possibility of memory price declines in the second half of 2026 from aggressive Chinese capacity expansion, plus the risk that demand itself shrinks after 2028 if big tech capex returns deteriorate.

Industry commentary has also pointed to stabilization in 2027-2028 after the current shortage. Samsung's own build-out is large: reports say Pyeongtaek P5 Fab 2 is targeted at 200,000-300,000 wafers per month with 2029 operation and investment expected above KRW 60tn. The supply-demand balance when these additions overlap remains an unverified variable.

The Other Side of Cost Inflation and Capex

Rising memory prices come back as input costs for the company's own finished-goods business. Management said MX operating profit fell on broader industry cost pressure including higher component costs, despite solid flagship sales.

Investment burdens are also rising, with Q2 capex of KRW 16.8tn, up KRW 5.5tn quarter on quarter. In addition, the size of bonus provisions depends on labor-management negotiations, leaving quarterly cost volatility in place.

Risk factors

Cycle Risk

Current profit levels rest on an unusual pricing environment marked by quarter-on-quarter increases in the mid-40% range for DRAM and the high-60% range for NAND. If price momentum slows or reverses, profitability near a 52.2% operating margin would be hard to sustain.

The gap between a 2.5% annual margin in 2023 and 52.2% in Q2 2026 itself illustrates the amplitude of this business. Judging cycle direction requires quarterly tracking of contract prices and bit shipments.

Customer and Qualification Risk

HBM depends heavily on qualification and allocation decisions by a small number of AI accelerator customers. The company said customer-by-customer HBM4 evaluations are concluding smoothly and demand is rising quickly in line with customers' second-half production ramps, but yield and ramp speed remain execution issues.

Management said it is expanding 1c-nano capacity and improving yields as planned. Allocation could shift if customer platform schedules slip or rivals catch up on specifications.

Policy and External Supply Variables

Overseas fab timelines are sensitive to policy and customer variables.

The company said Taylor Fab 1 is on track for 2026 readiness and Fab 2 construction is being prepared for late this year, but there is precedent for schedule changes, as when orders for Pyeongtaek P4 and the second Taylor fab were postponed amid market uncertainty.

Ecosystem imbalance also persists, as seen in the observation that Korea holds a high DRAM share but only 1.5% of the fabless market. Shifts in policy support, regulation and tariffs directly affect investment payback periods.

What to watch next

Early October 2026
Preliminary Q3 2026 results (revenue and operating profit). This is the first read on the direction versus Q2's KRW 171.4995tn revenue and KRW 89.4924tn operating profit, and on whether commodity DRAM and NAND price momentum held into Q3.
Late October 2026
Confirmed Q3 results and the earnings call, alongside a board meeting to finalize details of the roughly KRW 30tn Q3 cash dividend. This is also where investors can check whether HBM4 revenue met the guided more-than-tripling quarter on quarter.
Q4 2026
The start of second-generation 2nm mass production for mobile and progress on the HBM4E production transition. Key items to verify are whether the leading-edge share of foundry revenue and the number of 2nm design wins expand as management indicated.
End of 2026
Whether construction on Taylor Fab 2 begins and how Taylor Fab 1 readiness progresses. The timeline for leading-edge foundry capacity in the US is directly tied to AI and high-performance computing customer wins.
January 2027
After 2026 results are finalized, the board is scheduled to decide the method and size of the remaining shareholder return. This is when the split between cash dividends and buybacks or cancellations, and the shape of the next three-year return policy, may become visible.

Overall view

Samsung Electronics' recent results directly reflect the upper phase of the memory cycle.

Annually, operating profit recovered from KRW 6.5670tn (2.5% margin) in 2023 to KRW 32.7260tn in 2024 and KRW 43.6011tn in 2025; quarterly, it expanded from KRW 4.6761tn in Q2 2025 to KRW 89.4924tn in Q2 2026, lifting the operating margin to about 52.2%.

The growth driver is clear, but so is the structure: DS accounted for roughly 99.7% of company-wide operating profit in Q2 2026 while DX posted its first quarterly loss.

Looking forward, the debate narrows to two questions: whether the company's guidance for Q3 HBM4 revenue more than tripling and HBM4 exceeding 60% of HBM revenue in the second half shows up in reported numbers, and whether supply-demand tilts toward warnings of price declines from Chinese capacity additions or the view that shortages persist into 2027-2028.

Layered on top is the execution method and timing of the 2026 shareholder return program approved at an estimated KRW 90tn-110tn.

Bullish factors (price, mix, returns) and bearish ones (divisional concentration, post-expansion supply, cost pressure) coexist at the same moment, so interpretation may change with the outcomes at the checkpoints above. This report is for information purposes only and contains no buy or sell opinion or target price.

Sources

Korea Exchange (KRX) — Prices · Market Cap · Volume
FSS electronic disclosure system (DART) — Financial statements · Dividend filings

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Report written 2026-09-05 · Data as of 2026-09-04

This content is AI analysis of market data and web search results, provided for information only. It is not a solicitation or recommendation to invest. Investment decisions and their consequences are the investor's own responsibility. Data may be delayed or contain errors.