Samsung Electronics' Q3 Operating Profit Poised to Top 100 Trillion Won Amid Memory Boom

An FDA panel recommended approval for Grail's Galleri multi-cancer early detection test, bringing it closer to premarket approval. Samsung Electronics (005930) and Samsung C&T (028260), which invested $110 million in Grail, may benefit. The test, currently priced at $940, could expand market access if approved. Grail reported $136.8 million in U.S. revenue last year.

Analysts at Yuanta Securities and Kiwoom Securities issued diverging target prices for Samsung Electronics (005930) after its Q3 earnings. Yuanta raised its target to 630,000 won, citing a prolonged upcycle, while Kiwoom maintained its target at 350,000 won, forecasting a decline in memory chip prices. Both agree on Q3 earnings but differ on 2024 outlooks, with Yuanta projecting a 65% increase and Kiwoom a 5% decline in operating profit.

Samsung Electronics is projected to report a record quarterly operating profit of 107.7 trillion won, a 20.3% increase from the previous quarter, according to analysts. The company's semiconductor division is expected to achieve a 72–75% operating margin, with DRAM margins potentially exceeding 80%. TrendForce forecasts a 13–18% rise in DRAM prices for the third quarter.

Samsung Electronics is expected to report a record quarterly operating profit of 107.7 trillion won, up 20.3% from the previous quarter, driven by strong DRAM margins. Analysts attribute this to a shift in production capacity towards high-bandwidth memory and server products, tightening supply and extending delivery times. DRAM prices are forecast to rise 13-18% on-quarter, though this is a slowdown from the prior quarter's 60% increase.

Samsung Electronics (005930) preferred shares rose 15.34% in September, outperforming common shares at 9.00%, due to dividend and share-cancellation expectations. Analysts cite the company's 90-110 trillion won shareholder return plan. Top asset managers recommend semiconductor ETFs for long-term growth. OECD raised Korea's 2023 growth forecast to 3.7%, citing semiconductor exports and capital investment.

Samsung Electronics (005930.KS) and SK Hynix (000660.KS) are forecasted to report a combined Q3 operating profit of 190 trillion won, driven by strong demand for memory semiconductors. Samsung's profit is expected at 111.8176 trillion won, while SK Hynix's is projected at 78.0802 trillion won. Both companies are setting new quarterly records. China's CXMT is also expanding rapidly, with significant gains in market share and profitability.