Combined operating profit consensus for the two chipmakers falls from 661 trillion won to 640 trillion won

AI and HBM demand growth expectations remain intact

Employees work at the dealing room of Hana Bank's headquarters in Jung-gu, Seoul, on Friday. The Kospi opened down 231.42 points, or 3.29 percent, at 6,802.50, while the Kosdaq fell 20.01 points, or 2.39 percent, to 816.91. The won-dollar exchange rate stood at 1,347.50 won as of 9:02 a.m. [Yonhap]
Employees work at the dealing room of Hana Bank's headquarters in Jung-gu, Seoul, on Friday. The Kospi opened down 231.42 points, or 3.29 percent, at 6,802.50, while the Kosdaq fell 20.01 points, or 2.39 percent, to 816.91. The won-dollar exchange rate stood at 1,347.50 won as of 9:02 a.m. [Yonhap]

The won-dollar exchange rate has fallen sharply from the 1,500-won range to the 1,340-won range over the past two months, dragging down earnings forecasts for Samsung Electronics and SK hynix. The combined operating profit consensus for the two companies this year has shrunk by 21 trillion won ($15.7 billion) compared with two months ago.

The won-dollar rate closed at 1,345.9 won for the week ending Friday, according to industry data. That marks a 10.4 percent decline from 1,501.4 won on July 10.

As the won strengthens, profit outlooks have dimmed for domestic chipmakers that rely heavily on exports. The one-month consensus for this year's operating profit compiled around July 10 by Yonhap Infomax stood at 384 trillion won for Samsung Electronics and 277 trillion won for SK hynix, for a combined 661 trillion won.

As of Friday, the consensus had fallen to 377 trillion won for Samsung Electronics and 263 trillion won for SK hynix. The combined operating profit forecast for the two companies now stands at 640 trillion won, down 21 trillion won from two months ago.

Third-quarter earnings estimates have also been revised lower. Around July 10, the third-quarter operating profit consensus for Samsung Electronics and SK hynix stood at 115 trillion won and 84 trillion won, respectively, for a combined 199 trillion won. By Friday, those figures had slipped to 111 trillion won and 77 trillion won, for a combined 188 trillion won.

Because chipmakers generate a large share of revenue from exports, a stronger won can weigh on earnings when dollar-denominated sales are converted back into the local currency. The companies benefited from a weaker won in the first half of the year, but the recent reversal has turned won strength into a headwind.

SK hynix noted in its recent semiannual report that, assuming its foreign-currency asset and liability positions as of end-June remain unchanged, a 10 percent decline in the won-dollar rate would reduce pretax profit by approximately 4.75 trillion won.

Samsung Electronics also reported that exports accounted for more than 95 percent of its standalone first-half sales of 258.6 trillion won, with export revenue reaching 245.7 trillion won.

DB Securities forecast that Samsung Electronics' third-quarter results would come in slightly below market expectations, citing "unfavorable exchange rates and weaker-than-expected performance in the MX (finished-product) division, despite solid memory shipments and rising selling prices."

Both Samsung Electronics and SK hynix are reviewing their business plans for this year and next — including domestic and overseas investment and spending schedules — as they monitor exchange rate movements.

However, expectations for rising memory chip demand driven by AI industry growth remain intact. Market research firm TrendForce forecast that memory chip inventory levels will stay low, limiting shipment growth in the third quarter and sustaining upward price momentum.

With OpenAI's latest AI model GPT-6 Astra raising the prospect of reaching artificial general intelligence, and Chinese firms rolling out a succession of high-efficiency AI models, analysts expect the structural growth in memory chip demand to continue.

"Next year's memory chip market is expected to see accelerating growth in both HBM and general-purpose memory, driven by a surge in HBM4 demand alongside sustained strength in server DDR5 and enterprise SSD," said Kim Dong-won, head of research at KB Securities. "With the HBM market poised to post record growth next year and the US-China AI competition continuing, Samsung Electronics and SK hynix stand to benefit the most."


quq@heraldcorp.com