Samsung Electronics Q4 Operating Profit Outlook Jumps to 19 Trillion Won Amid Memory Shortage

Samsung Electronics (005930.KS) has entered what analysts describe as the strongest earnings growth phase in its history, driven by memory semiconductor supply shortages and surging artificial intelligence demand.

Inventory shortages at major customers combined with expanding high-bandwidth memory (HBM) allocation are rapidly strengthening the company's fundamentals. The consensus view is that a quantum leap in earnings will begin in the fourth quarter of this year and continue through steep growth in 2025 and 2026.

According to industry sources on the 18th, Samsung Electronics' fourth-quarter operating profit is projected to reach at least 19 trillion won ($14 billion). The forecast reflects expectations that earnings improvement from the memory supercycle will be steeper than previously anticipated.

The Q4 earnings outlook has been sharply revised upward. Securities firms have raised their fourth-quarter operating profit estimates from approximately 15 trillion won to 19 trillion won. While profitability in the smartphone and consumer electronics divisions may soften slightly due to rising memory costs, the semiconductor division is expected to drive companywide results strongly.

**Seller's Market Expected from 2025**

Industry observers expect a full-fledged "seller's market" to emerge from next year. Memory procurement rates at major customers in servers, PCs, and mobile devices have reportedly fallen to 70-80%. Some customers are said to be in emergency situations, having secured less than half of their required volume for 2026.

The supply shortage is expected to persist for some time due to declining supplier inventories and limited wafer expansion capacity from insufficient new cleanroom space. Some customers are reportedly withdrawing existing contracts and seeking renegotiations while accepting higher prices—an unusual phenomenon in the memory industry.

This supply crunch is expected to lead to surging memory prices. The financial investment industry forecasts DRAM prices will jump 80% year-on-year in 2026, nearly double the previous estimate of 46%. NAND flash price increase projections have also been revised upward from 33% to 50%.

HBM4 (sixth-generation), a next-generation revenue source, is also expected to contribute more to earnings. While Q4 this year represents a foundation-building phase, 2026 is assessed as the period of full-fledged earnings recovery. With the acquisition of Google Tensor Processing Unit (TPU) ASIC customers and expanded HBM4 allocation to Nvidia, HBM revenue in 2026 is projected to reach $14 billion (approximately 19.6 trillion won), up 126% year-on-year.

**Samsung ROE Expected to Double to 20% in 2026**

Buoyed by these tailwinds, return on equity (ROE), a key profitability metric, is expected to improve significantly. Samsung Electronics' ROE is projected to roughly double from 10% next year to 20% in 2026.

SK hynix (000660.KS), the HBM market leader, is also expected to continue its strong performance. The company has secured market dominance by virtually monopolizing HBM3E (fifth-generation) supply to Nvidia, while also benefiting from rising general server DRAM prices. Securities firms project SK hynix's fourth-quarter operating profit will reach 16 trillion won, with annual operating profit approaching 85 trillion won in 2026. Some forecasts even suggest operating profit could reach 100 trillion won.

Accordingly, rosy projections have emerged that the combined operating profit of Samsung Electronics and SK hynix could exceed 200 trillion won next year.

"Memory semiconductors are emerging as a lever amid the restructuring of global supply chains," an industry official said. "With HBM4 mass production and surging commodity memory prices converging next year, domestic semiconductor companies are highly likely to set all-time earnings records."

*Gap World is a column by reporter Seo Jong-gap that delves into the gaps in news during the era of technology hegemony competition. Check Gap World for the core issues and outlook on cutting-edge technology and semiconductors.*