Samsung Electronics Breaks Ground on FläktGroup HVAC Line in Gwangju

Samsung Electronics shares rose 3.45% to 270,000 won ($190) in early trading, driven by expectations of increased memory semiconductor demand from AI infrastructure investments. KB Securities forecasts second-half operating profit of 221 trillion won ($159.4 billion), up 587% year-over-year, citing strong memory market growth and AI-driven demand. Analysts expect expanded shareholder returns and a potential share price recovery.

Samsung Electronics began construction on a 240 billion won ($173 million) HVAC production line in Gwangju, South Korea. The 21,500-square-meter facility, set to open in 2028, will produce HVAC products from FlaktGroup, a German company Samsung acquired last year. The investment aims to bolster Samsung's global HVAC production capabilities, driven by growing demand for AI data center cooling solutions.

South Korea's KOSPI briefly rose above 7,000, then fell to 6,956.25. Samsung Electronics gained 3.26%, while SK hynix added 0.27%. Brokerages set near-term ceilings between 7,400 and 8,000. Samsung reported record Q2 revenue of KRW 171.5 trillion and operating profit of KRW 89.5 trillion.

Samsung Electronics (005930.KS) and SK hynix (000660.KS) are nearing early completion of their share buyback programs, potentially finishing by mid-October. Samsung has bought 74.69% of its target, spending 10.31 trillion won, while SK hynix has purchased 58.79% of its target, spending 24.39 trillion won. The early completion may increase volatility in the Korean stock market, as the buybacks have supported the KOSPI index.

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.