Samsung is set to reclaim its top spot in the global DRAM market, projecting a record fourth-quarter operating profit of 18.4 trillion won. This is driven by rising demand and prices for commodity memory amid expanding AI infrastructure.
South Korean chipmaker Samsung Electronics Co. is expected to reclaim the top spot in the global DRAM (Dynamic Random Access Memory) market, driven by improving operating margins amid rising demand and higher prices for commodity memory, as per a report by Pulse, the English service of Maeil Business News Korea.
Samsung Eyes Record Quarterly Profit
Citing sources, the news report noted that Samsung Electronics is projected to post 18.4 trillion won (USD 12.5 billion) in operating profit in the fourth quarter, well above the market consensus of 15.7 trillion won. The Device Solutions (DS) division, which handles the semiconductor business, is projected to raise around 15.1 trillion won in operating profit. If Samsung Electronics achieves an operating profit in the 18 trillion won range, it is also expected to set a new record for the highest quarterly operating profit among Korean companies, the news report added. The current record is 15.57 trillion won, set by Samsung Electronics in the third quarter of 2018, with the DS division accounting for 13.65 trillion won.
AI Demand and Rising Prices Fuel Growth
The key driver behind this is cited as improving operating margins stemming from increased demand and rising prices for general-purpose memory, sources said, as per the Pulse report. Commodity DRAM prices have surged sharply in recent months amid expanding investment in artificial intelligence (AI) infrastructure.
Regaining Market Leadership
Samsung Electronics' global DRAM market share is also projected to grow, the news report claimed. Samsung Electronics lost its top spot to SK hynix Inc. in the first quarter of this year due to the sluggish high-bandwidth memory (HBM) segment. It also lost its overall leadership in the memory market in the second quarter. However, according to market research firm TrendForce, Samsung's share of the overall DRAM market in the third quarter reached 32.6 percent, compared with SK hynix's 33.2 percent, narrowing the gap significantly from 6 percentage points in the second quarter to just 0.6 percentage point.
Positive Outlook for Q4 and Beyond
Samsung Electronics' performance is expected to continue rising. General-purpose DRAM prices are forecast to increase on quarter in the fourth quarter and Samsung Electronics maintains higher production capacity than its competitors, sources said, as per the Pulse report. "With commodity DRAM prices rising 46 percent compared with the previous quarter in the fourth quarter, Samsung's operating margin in its DRAM business is expected to rise to 53 percent," said Park Yu-ak, an analyst at Kiwoom Securities Co. (ANI)
(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)