“Memory chip shortage” outlook despite
“Turning a profit in the near future is possible”
4nm Groc LPU, 2nm Exynos etc.
High-profit leading-edge process revenue share doubled
HBM4 Q3 sales compared to previous quarter ↑ 3 times
Long-term contracts with 5 companies including AWS·MS·Google
...
According to FnGuide, a financial information company, on the 31st, most securities firms that issued reports before and after Samsung Electronics (005930)'s second-quarter earnings announcement predicted that Samsung Electronics' System LSI & Foundry division would incur operating losses in the trillions of won range for the third consecutive year. The securities firms estimated losses ranging from 5 to 7 trillion won this year, and most projected losses between 1 and 3 trillion won next year, except for DB Securities (3.1 trillion won profit). They also predicted that even if the loss narrows next year, a turnaround to profitability would not occur until after 2028.
Despite this, Samsung Electronics said at its earnings conference call the previous day, "While it is difficult to pinpoint the exact timing due to the nature of order-based industries, we expect a turnaround to profitability in the near future." This was interpreted as an intention to accelerate profitability starting in the second half of this year and bring forward the time of turning a profit as much as possible.
To achieve this, Samsung Electronics has set a goal of increasing the share of leading-edge process revenue to more than half of its total. The company aims to secure demand for AI chips from big tech companies by utilizing 4nm (nanometer) or smaller processes, which have higher profitability than mature processes.
Along with AI chips, foundries are also experiencing supply shortages. Top-ranked TSMC and second-ranked Samsung Electronics are both benefiting from this situation. Samsung Electronics has secured a series of foundry customers, including Tesla, Apple, Meta, Anthropic, and Broadcom, based on its cooperative relationships built through memory supply.
To increase the share of leading-edge process revenue, Samsung Electronics plans to produce base dies for HBM4 (High Bandwidth Memory) using a 4nm process. HBM4 is the latest HBM product that will be mounted on Nvidia's new chip 'Vera Rubin' in the second half of the year, and the base die is the bottom layer that makes up HBM4. Samsung Electronics plans to increase its quality competitiveness by adopting a more advanced base die process than its competitors.
Samsung Electronics aims to increase HBM4 sales by more than three times compared to the previous quarter in the third quarter, and as it expands production in earnest, it is expected that the 4nm foundry performance will also rise along with the sales of HBM4 from the memory business unit.
Previously, Samsung Electronics received an order for 'Groc3 Language Processing Unit (LPU)' from Nvidia and plans to mass-produce it using a leading-edge process in the second half of this year. It will also mass-produce the second generation 2nm mobile chip using a cutting-edge 2nm process. The company will produce 'Exynos 2700', an application processor (AP) for Galaxy smartphones to be launched in the second half of this year.
Samsung Electronics launched the first-generation mobile chip 'Exynos 2600' using a 2nm process last year, becoming the first in the mobile industry. It is also known that it is pushing ahead with the production of other chip makers' products. An industry insider said, "Many companies are looking for (Samsung Electronics') 2nm process."
Samsung Electronics is also expanding its Taylor fab, which serves as a foundry outpost in the US where big tech companies are concentrated. By producing AI chips locally upon request from big tech companies, it can strengthen cooperation. Fab 1 will start operating this year and Fab 2 will be built. The construction of an additional plant for a 1.4nm process is also under consideration.
The memory business unit will also focus on improving profitability centered on HBM4. Samsung Electronics expects that HBM4 sales will account for more than 60% of total HBM sales in the second half of this year. The company also said, "In a situation where supply constraints are expected next year as well, we plan to operate (supply) so that HBM4 and general DRAM maintain a similar share." This is a strategy to maximize profitability by increasing the proportion of HBM4, whose price will rise later, in the second half of this year, while focusing on general DRAM production capacity (capex) in the first half when prices surged.
▶ Source: https://n.news.naver.com/mnews/article/011/0004647176
