Samsung Locks In HBM4 Yields, Prepares Volume Push

The strengthening Korean won is reducing third-quarter earnings estimates for major electronics firms like Samsung Electronics and SK hynix, as their dollar-denominated revenues shrink when converted to won. Brokerages have cut profit forecasts, with Samsung's consensus operating profit dropping 9% and SK hynix's falling 6.7% in recent weeks. Both companies have warned of significant profit reductions due to exchange rate fluctuations.

Samsung Electronics plans to double production of its HBM4 and HBM4E memory chips next year, expanding glass carrier volume 2.5-fold. The company expects HBM4 revenue to exceed $10 billion by year-end, with HBM4 products accounting for 80% of shipments in 2025. Higher yields and increased demand for AI-related memory are driving the expansion, which may impact general-purpose DRAM supply and pricing.

The Export-Import Bank of Korea's Overseas Economic Research Institute forecasts the global semiconductor market to exceed $1.6 trillion this year, driven by AI infrastructure investments. Samsung Electronics and SK Hynix are expected to benefit, with memory semiconductor demand surging. KB Securities predicts Samsung's operating profit to rise 587% in the second half of 2023, reaching record highs.

Doosan Corp. will invest $700M to expand AI chip substrate material production. SK Hynix considers a memory plant in Japan. Samsung Electronics agreed to supply HBM4 chips to AMD. SK Hynix to send HBM4 samples to Nvidia. These moves aim to bolster positions in the AI semiconductor and memory markets.

Samsung Electronics (005930) plans to more than double HBM4 memory chip output next year, raising glass carrier demand 2.5-fold. Industry sources expect HBM production to grow 40% to 250,000 wafers, with HBM4 family shipments rising from 40% to 80%. Samsung began HBM4 mass production in February and provided HBM4E samples to Nvidia in May.

Samsung Electronics (005930) and SK Hynix (000660) are expected to complete their share buyback programs by mid-September, earlier than initially planned. Samsung has bought 39.8 million shares for 10.3 trillion won, while SK Hynix purchased 14.15 million shares for 24.39 trillion won. Their buybacks have supported the KOSPI index, but their conclusion may impact market stability. Analysts watch for third-quarter earnings and foreign fund inflows.