[Edaily Reporter Kim Kyung-eun ] On the 23rd, KIWOOM Securities issued a forecast stating that SamsungElectronics(005930)’s third-quarter earnings would fall short of previous expectations due to a slowdown in the upward trend of general-purpose memory prices. However, the firm maintained its “Buy” investment rating and target price of 350,000 won, noting that expanding market share in high-bandwidth memory (HBM) and the foundry business would serve as new growth drivers.

Park Yu-ak, an analyst at KIWOOM Securities, stated in a report released today, “We are shifting the investment focus for SamsungElectronics from ‘rising prices of general-purpose memory’ to ‘expanding market share in HBM and foundry,’ and recommend a ‘Buy’ stance from a medium- to long-term perspective.”

KIWOOM Securities projected SamsungElectronics’ third-quarter revenue at 198 trillion won and operating profit at 107 trillion won. While this represents increases of 15% and 19%, respectively, compared to the previous quarter, it falls short of the previous forecast of 213 trillion won in revenue and 122 trillion won in operating profit.

The firm cited the decline in the average won-dollar exchange rate and a slowdown in the upward trend of standard DRAM prices as the reasons for lowering its earnings forecast. It revised its forecast for the third-quarter standard DRAM price growth rate downward from 20% to 12% quarter-over-quarter.

On the other hand, the company expects continued growth in its HBM and foundry businesses. As expected, the HBM division continues to post significant earnings growth. Profitability in the foundry division is also expected to improve, driven by the mass production of HBM4 base dies and the expansion of Exynos 2700 production. Operating profit for the semiconductor (DS) division in the third quarter is estimated at 107.3 trillion won, a 20% increase from the previous quarter.

For the fourth quarter, the company projected revenue of 200 trillion won and operating profit of 111 trillion won, representing increases of 1% and 4%, respectively, compared to the previous quarter. The upward trend in prices for general-purpose DRAM and NAND—which have driven earnings thus far—is expected to level off due to price resistance from customers and sluggish consumer demand. The quarterly growth rates for DRAM and NAND prices in the fourth quarter are projected to be 3% and 12%, respectively.

He projected that HBM and the foundry business would fill the gap left by standard memory. In the HBM sector for the fourth quarter, he anticipated continued strong growth as HBM4 sales account for more than half of total sales. He also expected the foundry and System LSI businesses to maintain their revenue growth momentum with the start of mass production of the Exynos 2800.

Analyst Park noted, “SamsungElectronics’ stock price has been recovering after plummeting amid market concerns over the general-purpose memory segment, which had previously driven earnings growth.” He added, “In the general-purpose memory sector, downward pressure on prices is expected to intensify amid competition for market share with China’s CXMT and YMTC,” and stated, “We believe SamsungElectronics’ HBM and foundry divisions will expand their market share and establish themselves as new growth engines.”