Samsung Electronics set to reclaim top spot in DRAM market in Q4
Seoul, December 8
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.
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.
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.
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.
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
Reader Comments
While this is impressive, I hope this surge in DRAM prices doesn't trickle down to us consumers. We're already dealing with high prices for electronics. Maybe this will push Indian companies to invest more in our own semiconductor ecosystem? Aatmanirbhar Bharat!
The AI infrastructure boom is driving everything! Samsung catching up shows how competitive this market is. As an IT professional, I'm just hoping this leads to better, faster memory modules becoming available in the Indian market soon. 🤞
Interesting analysis. The shift from HBM to commodity DRAM being the driver is key. It shows market demand can change leadership quickly. From an investment perspective, this volatility makes tech stocks both risky and exciting.
A 53% operating margin is staggering. While I'm happy for Samsung's recovery, one has to wonder if such high margins are sustainable or healthy for the market in the long run. Could stifle innovation if the competition gets too lopsided again.
Most of our phones use Samsung or SK Hynix memory. This competition is good for us. Better technology at lower costs, hopefully! The record profit is mind-boggling though – 12.5 billion USD in a quarter? That's more than the GDP of some small states!
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