As U.S.-based Micron Technology posted an earnings surprise, expectations for the earnings of domestic semiconductor companies such as Samsung Electronics and SK Hynix are rising ahead of the domestic third-quarter earnings season. In particular, with forecasts that Samsung Electronics, which is set to announce its preliminary earnings in early this month, will achieve the era of 100 trillion won in quarterly operating profit driven by the full-scale mass production of HBM (High Bandwidth Memory) 4, semiconductor stocks are expected to lead the stock market in the fourth quarter as well.
According to financial investment industry sources on the 5th, Samsung Electronics is scheduled to announce its third-quarter preliminary earnings on the 8th. According to data compiled by financial information provider FnGuide, Samsung Electronics' third-quarter revenue consensus estimate stands at 201.7276 trillion won, and operating profit at 108.1312 trillion won, representing year-on-year increases of 134.40% and 788.79%, respectively. Although market expectations have eased somewhat due to the recent decline in the won-dollar exchange rate, it appears that achieving 100 trillion won in quarterly operating profit is a safe bet.
A notable aspect is the improvement in profitability resulting from the full-scale mass production of HBM4. According to Samsung Securities, Samsung Electronics' third-quarter HBM revenue is expected to increase by 60% compared to the previous quarter. Samsung Securities also forecasted that Samsung Electronics' ASP (Average Selling Price) will rise by 80% next year.
SK Hynix, which will announce its third-quarter earnings at the end of this month, also appears set to continue its upward earnings trend. According to FnGuide, SK Hynix's third-quarter revenue consensus estimate is 98.2718 trillion won, a 301.95% year-on-year increase, while operating profit is 77.2214 trillion won, up 578.37%.
Lee Ho-seung, a researcher at NH Investment & Securities, stated, "The level of sustainable operating profit based on the application of LTAs (Long-Term Agreements) is crucial." He added, "With the recent growth in the ASIC (Application-Specific Integrated Circuit) market, HBM demand will expand further. Moreover, as memory demand is actually increasing due to the proliferation of inference and AI agents, we expect the strategic value and binding force of LTAs to be strengthened." The researcher further noted that "additional shareholder return policies disclosed in the third-quarter earnings release will be a positive factor for the stock price."
The securities industry predicted that Samsung Electronics' stock price would gain momentum in the fourth quarter due to factors such as consecutive earnings growth and share buybacks. Lee Jong-uk and Kim Kyung-bin, researchers at Samsung Securities, stated, "The high volatility in the stock price caused by the sharp rise in DRAM prices in the first half has settled down, and the stock price began a gradual recovery starting last August." They added, "The downside rigidity of the stock price will stand out through attractive valuation, continuous earnings growth, and shareholder returns."
They further noted, "Nvidia and TSMC have already proven that consecutive earnings growth can lead to stock price increases even without stimulating momentum." They added, "Investors' conventional strategy of approaching memory stocks solely as a momentum play is making Samsung Electronics' stock price even more attractive."
Micron announced on the 30th of last month that its revenue for the fourth quarter of its fiscal year (June to August) reached $54.23 billion, significantly exceeding the market consensus estimate of $51.07 billion, fueling expectations for AI (Artificial Intelligence) memory demand. The company provided a revenue guidance of $61.5 billion for the next quarter.
Go Yun-ho, a researcher at IBK Investment & Securities, also stated, "The memory supply shortage situation is expected to persist." He said, "As a result, profitability will be maintained at current levels and profit scale will grow steadily, leading us to judge that the sector is in a significantly undervalued phase."
The recent successive releases of new AI models are also a positive factor for semiconductor companies. AI agent services such as OpenAI's "Dots" and Meta's "Muse" are receiving favorable reviews for their outstanding performance. AI agents, which handle tasks autonomously like secretaries, process large volumes of data and are expected to significantly increase semiconductor demand.
Based on these earnings expectations, semiconductors are also projected to be the main highlight of the domestic stock market in the fourth quarter. Lee Kyung-min, a researcher at Daishin Securities, stated, "The U.S. producer price index came in below expectations, Micron's strong results reinforced risk-on sentiment, and Korea's semiconductor exports increased by 262.8% year-on-year." He added, "If Samsung Electronics' earnings guidance meets or exceeds the lowered market expectations, subsequent profit forecasts could be revised upward. Along with the recovery of semiconductor leadership, we can expect the KOSPI to break through and stabilize above the 7,000 mark."
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