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Samsung memory virtually printing money Samsung almost reported its first-ever ₩200 trillion quarterly revenues in its third 2026 quarter as soaring AI demand for HBM, DRAM and NAND enabled high prices for its semiconductor technology. Revenues of ₩195.3 trillion ($145.5 billion) rose 121.8 percent Y/Y and there was an operating profit of ₩107.4 trillion ($80 billion); amazing numbers - but now the new normal. The operating profit number made Samsung Electronics the world’s first tech company to exceed ₩100 trillion ($74.5 billion) in quarterly operating profit. Its DS (Device Solutions) semiconductor business accounted for 72 percent of Samsung Electronics’ revenues in the quarter; ₩147 trillion ($109.6 billion) up 15 percent Q/Q. Within that memory, at ₩140.7 trillion ($104.8 billion), accounted for the vast bulk of it, 95.7 percent, achieved by ramping up HBM4 sales and meeting demand for server SSDs. Competitor SK hynix reported revenues of ₩104 trillion ($78.9 billion) in its third 2026 quarter, with a ₩39.8 trillion (c$30 billion) profit; less revenue and profit than the directly comparable Samsung DS division. The other Samsung divisions brought in much less money than the DS unit; - DX mobile/TV/home appliances - ₩52.1trillion ($38 billion), up 8 percent Q/Q, with an operating loss of ₩0.8 triilion ($600 million), - SDC - display - ₩8 trillion ($6 billion), up,14 percent Q/Q, - Harman - automotive/lifestyle - ₩4.3 trillion ($3.2 billion), up,14 percent Q/Q For Harman, quarterly revenues of $3.2 billion is magnificent for audio products, dwarfing Sonos’ $375 million for its latest quarter. Yet, it is just 2.2 percent of DS business unit revenues; rounding error territory. Oligopolies under-supplying high-demand memory products into rampant growth markets with a $30 million-per fab cost of entry can make a lot of money. And they certainly are. Samsung said strong demand momentum for servers led to higher market prices across all applications. It’s not easy technology to manufacture; this being very high technology indeed. But it’s certainly bringing in the money. Samsung noted its Foundry Business experienced a notable revenue and earnings improvement on HBM base-die sales growth and expanded advanced-node sales, as well as continued order wins centered on 2nm HPC customers, including major hyperscalers. Samsung expects semiconductor demand is set to remain robust. Next quarter, its Memory Business expects industry-wide competition for AI leadership to drive continued AI infrastructure investment. Memory demand growth is projected to revolve around new CPU and GPU platform-related products, while surging QLC SSD demand will be linked to the expansion of personal AI agent services. It intends to further increase HBM, server DRAM, and SSD sales, and specifically increase the supply of high-speed server DDR5 product and QLC SSDs. Its outlook is, frankly astonishing, as it expects AI infrastructure capital expenditure to reach a historic level in 2027, greater than this year, as the AI ecosystem expands. In fact, “AI-driven demand will far exceed the industry supply in comparison with 2026.” Note that “far exceeed.” Samsung says investments are planned for new fabs and other infrastructure to meet strong AI and HPC demand. It’s also returning wads of cash to shareholders via dividends and share repurchases. Comment Rich VCs and private equity firms might be looking at the memory semiconductor industry's ability to make gargantuan revenues and profits from vastly undersupplied products to a high-demand market and assessing if this is a short-term boom that will start running out of steam by, say 2031, or the new long-term normal with a reliable revenue earning trend at this level out to 2040 and 2050. If the latter then why not buy into a memory market bit player and fund major league expansion to supply product into the market currently dominated by Samsung, SK hynix/Solidigm, Micron, Kioxia and Sandisk? Bain, having successfully taken Kioxia out of Toshiba, is surely having analysts run the numbers for such a venture. Another point. The previous relatively balanced Samsung business division organization now looks thoroughly out of balance with a dominant DS business unit towering over the others in revenue terms. This could prompt significant divisional level reorganization in Samsung. And the same applies to the SK Group where SK Hynix revenues are going sky-high in a similar fashion.
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