Samsung, SK Hynix Stir Retail Investors as Combined Third-Quarter Operating Profit Nears $145 Billion

Lee Jae-yong and Chey Tae-won tout business serving the nation as Samsung and SK Hynix near $145 billion in third-quarter operating profit

Samsung and SK Hynix eye the $145 billion operating-profit club in the third quarter

Samsung Electronics poised to top $72.5 billion in quarterly operating profit for the first time

SK Hynix also on track for nearly $56.6 billion in third-quarter operating profit

"Opening a new horizon in South Korea's economic history"

Brokerages keep raising target prices

Brokerages are again raising target prices for Samsung Electronics Co. and SK Hynix Inc. as the companies' combined third-quarter operating profit is projected to approach 200 trillion won, or about $144.9 billion. Analysts say surging demand for artificial-intelligence servers and a sharp jump in memory prices have cemented a supplier-driven market structure, lifting earnings to a new level. Some in business circles also argue the results validate the memory supercycle and warrant a reassessment of the leadership of Samsung Chairman Lee Jae-yong and SK Group Chairman Chey Tae-won.

FnGuide, a South Korean financial data provider, said the consensus estimate for Samsung Electronics' third-quarter operating profit stood at 110.2803 trillion won, or about $79.9 billion, as of Sept. 30. That would mark an 806% surge from 12.1661 trillion won a year earlier and a 23% increase from 89.4924 trillion won in the previous quarter. If achieved, Samsung would surpass 100 trillion won in quarterly operating profit for the first time in its history.

SK Hynix is also set to post record earnings. The consensus estimate for third-quarter operating profit stands at 78.0577 trillion won, or about $56.6 billion, up 29% from 60.5426 trillion won in the prior quarter. Combined with Samsung's estimate, the total reaches 188.338 trillion won, or about $136.5 billion, bringing the two chipmakers close to the symbolic 200 trillion won mark.

The main driver behind the blockbuster outlook is a sharp rise in memory prices and intensifying supply bottlenecks. Market researcher TrendForce projects third-quarter average selling prices for commodity DRAM will rise 13% to 18% from the prior quarter, while NAND flash prices will gain 10% to 15%. Market participants say booming AI server demand and intensifying competition among big tech companies to secure memory have further strengthened suppliers' leverage.

Major South Korean brokerages have recently raised target prices for both companies in quick succession. Yuanta Securities lifted its target for Samsung Electronics to 630,000 won from 530,000 won, while Mirae Asset Securities raised its target to 400,000 won from 370,000 won. For SK Hynix, DB Financial Investment set a target of 2.3 million won and Mirae Asset put its target at 3.1 million won. NH Investment & Securities and Eugene Investment & Securities maintained their Samsung targets at 530,000 won and 560,000 won, respectively, while recommending a strong buy.

Brokerages say recent concerns that AI investment may be peaking are overdone. NH Investment & Securities said AI spending has entered a new phase, expanding beyond hyperscalers to companies and governments. The spread of inference workloads and AI agents will accelerate demand for central processing units, ultimately leading to excess demand for memory, the brokerage said.

That would extend the memory shortage through 2027 and further strengthen long-term supply agreements, or LTAs. The brokerage also said the increase in average selling prices for high-bandwidth memory next year could exceed its previous estimate of 45%.

Eugene Investment & Securities said Samsung Electronics would deliver earnings that stand out from peers, backed by turnkey capabilities and a distinctive pricing strategy. It added that the negotiating environment for next year's HBM prices remains favorable for suppliers even after the fourth quarter, leaving substantial room for further upward revisions to earnings and the share price. Narrowing losses in Samsung's foundry and System LSI divisions, stronger competitiveness in custom memory and a possible reevaluation of shareholder-return policy after third-quarter results were also cited as positive momentum.

Attention is now turning to Micron Technology Inc.'s fiscal fourth-quarter earnings report due on Sept. 30. Because Micron's June-to-August reporting period overlaps by roughly two months with the July-to-September third quarter for South Korean chipmakers, the results serve as a leading indicator for conditions and profitability across the memory industry.

If Micron's revenue guidance and margins top market expectations, the debate over a semiconductor peak-out that has weighed on stocks could largely fade. If gains in selling prices lose momentum or margins retreat, short-term volatility could increase.

One brokerage executive said combined quarterly operating profit nearing 200 trillion won for Samsung Electronics and SK Hynix is a symbolic sign that the memory supercycle has expanded beyond anything seen in the past. The executive said the two chairmen's leadership also deserves to be reassessed because they have opened a new earnings level in South Korea's economic history.

Kang Kyung-ju, Hankyung.com reporter memory@hankyung.com