Samsung Electronics has achieved its highest quarterly performance ever, driven solely by its semiconductor division. The memory semiconductor sector accounted for 99% of the company's total profit, propelling its growth. With continued demand for memory expected in the second half of the year, the company plans to focus on enhancing its competitiveness in advanced semiconductors, including next-generation high-bandwidth memory (HBM).

On July 30, Samsung Electronics reported that its semiconductor (DS) division generated sales of 127.5 trillion won and an operating profit of 89.2 trillion won for the second quarter of this year. The overall operating profit margin for the DS division reached 70%, with estimates suggesting that the DRAM business alone exceeded an 80% profit margin. The semiconductor division was responsible for 99.7% of the company's total operating profit.

The surge in memory semiconductor prices has been driven by increased investment in artificial intelligence (AI) infrastructure. The expansion of sales for high-value products like HBM has also contributed significantly. Samsung holds the largest production capacity among the top three global memory manufacturers, benefiting the most from soaring prices of general-purpose DRAM and NAND. The company's DRAM wafer production is currently at a level of 650,000 to 700,000 wafers per month.

A Samsung representative stated, "We have increased shipments across all memory products, including DRAM, NAND flash, and HBM, targeting hyperscale customers. Shipments rose by 10% compared to the previous quarter, with DRAM showing a single-digit increase, achieving record sales overall."

The memory supply shortage is expected to persist until 2028, leading to an increase in long-term supply agreements (LTA) to ensure supply stability. Samsung noted, "We are planning long-term supply contracts for 60-70% of our total memory production capacity, as the outlook for prolonged supply shortages has prompted many customers to request multi-year supply agreements." The company has already completed contracts with five major global data center customers and is pursuing additional agreements with five large clients related to AI demand.

The growth of the HBM business is also accelerating. As of the first quarter of this year, Samsung ranked second in the global HBM market with a 21% share, following SK Hynix, which holds 58%. Sales of the sixth-generation HBM, HBM4, are expected to triple compared to the previous quarter, with HBM4 sales projected to exceed 60% of total HBM revenue in the second half of the year.

In addition to strengthening next-generation HBM technology, Samsung is enhancing its foundry business competitiveness. Following the application of 4-nanometer processes to HBM4 and HBM4E, the company plans to utilize a 2-nanometer process for HBM5 to further improve performance and power efficiency. Samsung emphasizes its position as a comprehensive semiconductor company that handles memory, foundry, and packaging. A Samsung representative stated, "The number of 2-nanometer orders is expected to more than double compared to last year, and we anticipate a turnaround to profitability in the foundry division in the near future."

Investment in securing technological leadership remains a priority. In the second quarter, research and development expenses reached a record 16 trillion won, a 41% increase from the previous quarter. Capital expenditures (CAPEX) for the second quarter also rose by 5.5 trillion won to 16.8 trillion won compared to the previous quarter. The foundry division is set to begin operations at the U.S. Taylor Fab 1 by the end of this year, with construction of Taylor Fab 2 for expanding 2-nanometer capacity also slated to start this year, aiming for mass production by 2030.

Analysts expect the strong performance to continue in the second half of the year. KB Securities forecasts that memory prices will rise by at least 30% in the third quarter, projecting Samsung's third-quarter sales and operating profit to reach 209 trillion won and 110 trillion won, respectively, anticipating a third consecutive earnings surprise. The annual operating profit forecast for this year is around 380 trillion won, with some speculating the possibility of surpassing 400 trillion won.