Samsung and SK Hynix Q3 Earnings to Test the Durability of the Global AI Trade
TREE NEWS reports: Samsung Electronics and SK Hynix are set to report third-quarter results in the coming weeks, with consensus expectations near record levels. Analysts forecast Samsung will post KRW 199.1 trillion in revenue and KRW 105.6 trillion in operating profit, while SK Hynix is expected to deliver KRW 94.1 trillion in revenue and KRW 74.1 trillion in operating profit. Combined operating profit could approach a record KRW 189.9 trillion, reflecting the intense supply shortage in memory chips driven by AI demand.
Market Implications
The earnings will be a critical test for the global AI trade. Investors are watching whether the current semiconductor supercycle is a short-term spike or a structurally resilient shift. Over the past three months, analysts have trimmed Samsung’s revenue and profit estimates by 2.6% and 4.4%, respectively, and SK Hynix’s by 5.3% and 5%. The downward revisions are largely due to a stronger Korean won reducing dollar-denominated sales, not a deterioration in memory demand. This highlights how currency fluctuations can impact tech giants’ short-term results.
Key areas to watch include the sustainability of memory price increases, the profit-locking effect of long-term agreements (LTAs), and whether next-generation high-bandwidth memory (HBM4) can translate into bottom-line profits. DRAM and NAND average selling prices (ASPs) surged in Q2, but the pace of increases is expected to slow in Q3. Samsung’s DRAM ASP is projected to rise 16.5% in Q3, but only 5.4% in Q4, indicating fading momentum. The growing adoption of LTAs—Samsung has locked in 60-70% of its memory capacity, and SK Hynix completed LTA negotiations with about ten key customers in Q2—provides stability but also caps upside during rapid price increases.
In HBM4, Samsung is expected to more than triple its Q3 sales from Q2, accounting for over 60% of its total HBM revenue in the second half of 2026. SK Hynix faces the challenge of maintaining its HBM3E leadership while scaling HBM4 production. The outcome will offer early clues about the competitive landscape.
The insatiable demand for high-bandwidth memory is reshaping the tech industry. As AI services like Meta’s agent-based Muse require sequential operations and higher memory bandwidth, data center architectures are shifting. Traditional generative AI processes about 100 tokens per second, while agentic AI demands 1,000 tokens per second. This tenfold jump is fundamentally changing data center design, with memory becoming the critical circulatory system.
Beyond memory, Samsung’s foundry business is expected to turn profitable in Q3 after consecutive losses since 2023, driven by expanded 4nm LPU capacity and improved yields. However, the device experience (DX) division, which includes smartphones and TVs, faces a “chip inflation paradox.” In Q2, the DX division posted an operating loss of KRW 8 billion as rising component costs offset strong sales of premium devices like Galaxy Foldables. The key question for Q3 is whether high-end product sales can absorb these cost pressures.
Key Takeaways for Investors
- Earnings as a litmus test: The results will determine whether the AI-driven semiconductor rally has legs or is nearing a peak. Strong LTAs and HBM4 profitability could extend the supercycle.
- Currency headwinds: A stronger won may continue to pressure dollar-denominated revenues, but this is a translation effect, not a demand issue.
- Memory price trajectory: Slowing ASP growth could reignite “peak cycle” debates, impacting semiconductor stocks and the broader tech sector.
- Foundry turnaround: A profitable foundry would remove a major overhang on Samsung’s valuation.
- Divergence within Samsung: The memory boom is a drag on the DX division, highlighting internal cross-currents.
In the coming weeks, these earnings will not only shape the short-term market value of the two giants but also set the tone for global tech infrastructure investment for years to come.
