Samsung Heads Into Q3 Earnings With 5 Open Questions About Its Chip Boom

Samsung Electronics will publish preliminary Q3 earnings steering on Thursday. Analysts anticipate working revenue of 106.1 trillion received ($79.1 billion), which might mark a fourth straight file quarter.

Demand for synthetic intelligence (AI) infrastructure continues to be outrunning reminiscence provide. However, reminiscence value positive aspects slowed in the course of the quarter, leaving traders questioning whether or not chip margins have topped out.

What to Watch as Samsung’s Preliminary Q3 Numbers Land

Samsung’s guidance filings checklist solely consolidated gross sales and working revenue. An in depth report follows in late October.

Thursday’s launch will subsequently reply the revenue query first. The different 4 factors relaxation on analyst estimates, business information and the market’s response.

1. A Record Profit Built on Trimmed Forecasts

Profit is the important thing headline quantity, and it’s anticipated to succeed in practically 9 instances the 12.17 trillion received Samsung earned a 12 months earlier.

That would high the file second-quarter operating profit of 89.5 trillion won ($62 billion) Samsung posted in July.

However, that determine displays a downward revision. The LSEG SmartEstimate, primarily based on 21 analysts, has dropped 7.7% for the reason that finish of August.

Two elements sit behind the lower. 

• Slower reminiscence value positive aspects. Memory chip costs stored climbing in Q3, although the tempo eased.
• A stronger received: The forex rallied 14.3% towards the greenback in Q3, its largest quarterly acquire since early 1998. That lowers the worth of Samsung’s abroad earnings when they’re introduced dwelling.

2. Memory Margins Stuck at 76%

SK Securities analyst Han Dong-hee places Samsung’s Q3 reminiscence working margin at 76%. That would go away it unchanged from the April to June interval.

US rival Micron, in the meantime, expects its gross margin to ease to 86.3% from 87% this quarter. The firm partly blamed worker compensation prices.

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3. Where DRAM Prices Head in This autumn

TrendForce expects the slowdown in memory price gains to proceed into This autumn. It initiatives standard DRAM contract costs will rise 10% to fifteen% over Q3, after a roughly 60% bounce within the second quarter.

Avril Wu, TrendForce’s senior vp for analysis, linked a part of the slowdown to long-term provide offers.

“With ceiling-price mechanisms inbuilt, the speed of value will increase has slowed down…long-term agreements symbolize an more and more increased proportion of suppliers’ whole ‌output. With ⁠ceiling-price mechanisms inbuilt, the speed of value will increase has slowed down,” Wu said.

Samsung mentioned in July it goals to safe long-term contracts masking about two-thirds of its reminiscence output.

4. Samsung Chips Away at SK Hynix in HBM

SK Hynix remains the largest provider of high-bandwidth reminiscence (HBM), which AI information facilities rely on. Samsung has been gaining on its rival this 12 months.

Samsung had fallen behind after delays in qualifying its merchandise for Nvidia. This 12 months, bigger shipments of its newest HBM4 chips have helped it get well floor.

J.P. Morgan’s estimates present how far that restoration might go. The financial institution sees Samsung’s HBM market share rising to 34% in 2026, up from 20% final 12 months. Over the identical interval, SK Hynix’s share is forecast to fall to 46% from 60%.

5. How the Samsung Stock Takes the News

Samsung’s final preliminary steering, on July 7, confirmed file Q2 working revenue. Shares nonetheless fell 6.92% from the prior near 296,000 received. (*5*) linked the drop to investor worries over capital spending and demand.

After the complete outcomes on July 30, the inventory slipped solely 0.72% from the prior near 207,000 received.

On October 7, Samsung traded at 271,750 received at 1:45 p.m. Seoul time, down 0.09% on the day. That leaves it about 27% beneath its 52-week high of 374,500 received.

Still, shares are up 111.48% up to now in 2026. Thursday’s preliminary determine will present whether or not one other file, this time towards lowered estimates, meets an analogous response.

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