Latest news with #RyuYoung-ho
The Star
10 hours ago
- Business
- The Star
Nvidia supplier SK Hynix boosts investment plan after record Q2 profit
FILE PHOTO: The logo of SK Hynix is seen at its booth during The 26th Semiconductor Exhibition (SEDEX 2024) in Seoul, South Korea, October 23, 2024. REUTERS/Kim Hong-Ji/File Photo SEOUL (Reuters) -Nvidia supplier SK Hynix on Thursday boosted its 2025 investment plan after posting a record quarterly profit as it seeks to alleviate investor concerns about slowing growth for artificial intelligence chipsets. The South Korean chipmaker expected a "low likelihood of sharp decline in demand" in the second half, citing a stable customer inventory level and demand growth driven by new model launches by customers. SK Hynix said it was on track to double high-bandwidth memory (HBM) chip sales for the full year compared to 2024. The company's revision of its capital expenditure to proactively respond to customer demand for next year, "appears to reflect its confidence" as it faces major competition from Samsung Electronics next year, said Ryu Young-ho, a senior analyst at NH Investment & Securities. In March, SK Hynix said it planned to finalise sales with customers for the 2026 volume within the first half of this year. "SK Hynix foresees that increasing competition among big tech companies to enhance inference of AI models would lead to higher demand for high-performance and high-capacity memory products," it said in a statement. SK Hynix reported a 9.2 trillion won ($6.69 billion) operating profit for the April-June period, up 69% from 5.5 trillion won a year earlier. That compared with a 9.0 trillion won average forecast by LSEG SmartEstimate, which is weighted toward analysts who are more consistently accurate. Revenue rose 35% to 22.2 trillion won during the quarter. Its profit is double the quarterly operating profit expected by crosstown rival Samsung Electronics , which this month projected a worse-than-expected 56% plunge in second-quarter operating profit due to weak AI chip sales. SK Hynix overtook Samsung Electronics as the world's top memory chip maker in the first quarter due to its leadership in HBM chips, a crucial component of AI chipsets designed by the likes of Nvidia that assist the processing of vast amounts of data to train AI models. After posting a series of record profits boosted by strong AI demand, SK Hynix is bracing for potential U.S. tariffs and rising competition from rivals in supplying advanced chips to Nvidia, analysts say. Earlier this month, U.S. President Donald Trump threatened to soon introduce tariffs on semiconductors. SK Hynix said in April that the proportion of its exports to the United States was not high, but analysts said the company could face pricing pressure from customers squeezed by U.S. tariffs. Last Thursday, SK Hynix saw its shares close about 9% lower after Goldman Sachs downgraded the stock to "neutral," expecting HBM prices would decline for the first time next year. Shares of SK Hynix are up 54.7% so far this year, outperforming the KOSPI's 32.7% rise. ($1 = 1,374.5800 won) (Reporting by Heekyong Yang and Joyce Lee and Hyunjoo Jin; Editing by Leslie Adler, Jamie Freed and Lincoln Feast.)
Korea Herald
2 days ago
- Business
- Korea Herald
Diverging prospects: Samsung eyes rebound, SK braces for HBM shakeup
As fears of HBM oversupply mount, intensifying price competition puts pressure on chipmakers, reshaping AI memory landscape As concerns over a potential supply glut in the high-bandwidth memory market for artificial intelligence semiconductors intensify, South Korea's two memory chip giants — Samsung Electronics and SK hynix — are seeing sharply divergent stock performances. According to the Korea Exchange on Tuesday, so far in July, Samsung Electronics' shares have surged 13.38 percent on the country's main bourse, Kospi, outpacing the broader index's 4.53 percent rise. On the contrary, SK hynix's shares have dropped 6.68 percent during the same period. Analysts say growing fears of oversupply and falling prices in the HBM segment, a key component in AI chipsets, are driving foreign investors to offload shares. This is particularly the case for those of SK, since it holds the No. 1 position in the global HBM market. Samsung's entry into the market of sixth-generation HBM chips, known as HBM4, is expected to erode the price premium previously enjoyed by SK hynix with its fifth-generation HBM3E products. 'There are rising concerns in the market about potential oversupply of HBM from this year and onward,' said Ryu Young-ho, a senior analyst at NH Investment & Securities. 'It has triggered increased selling pressure on SK hynix shares.' At the same time, Samsung Electronics' stock — long overshadowed by SK hynix — has begun to recover as the company secured supply deals for both HBM3 and HBM3E with AMD and Broadcom, signaling renewed confidence in its technological competitiveness. 'If Samsung succeeds in entering Nvidia's HBM supply chain, the oversupply issue could become even more pronounced,' Ryu said. Currently, SK dominates the global HBM market with a 53 percent share, followed by Samsung with 38 percent. With Micron joining the fray, competition is expected to intensify. Samsung shares are also benefiting from expectations of increased HBM revenue, further buoyed by the recent lifting of export restrictions on Nvidia's China-specific AI chip, the H20. With new market avenues opening, Samsung's momentum in the HBM space appears to be strengthening. As the market dynamic shifts, industry insiders are watching whether the HBM sector will transition from a technology-driven race to a price-driven war. Until recently, tight supply allowed suppliers to dictate prices. But as supply loosens, big tech clients like Nvidia and AMD are likely to gain leverage in price negotiations. 'The balance of power is shifting from suppliers to buyers,' said Ryu. 'We may see weaker-than-expected price hikes for the upcoming HBM4 chips.' Investment bank Goldman Sachs also forecast that HBM prices could fall by around 10 percent next year, citing the likely impact of increased competition and capacity. 'HBM has entered a maturing phase,' said an industry source who requested anonymity. 'As supply constraints ease, chip makers will need not only technical excellence but also strong price competitiveness to survive. The real price war is likely to begin in earnest next year.' Against this backdrop, both Samsung and SK are racing to mass-produce HBM4 by the second half of this year. SK was the first chip maker to supply 12-layer HBM4 samples to Nvidia in March. Samsung is expected to follow suit within this month, shipping its samples to both Nvidia and AMD. In an effort to regain lost ground after delays with HBM3E chips, Samsung is utilizing its advanced 1c DRAM technology, which employs a 10-nanometer process, in HBM4, aiming for high precision and yield stability. It is also actively investing in its Pyeongtaek Campus Line 4 (P4) to support volume production. 'Samsung appears to be rebuilding its strategy with a long-term perspective to win back customer trust, rather than focusing on short-term results,' said an anonymous source who is familiar with the matter. 'Though Samsung may be behind SK in HBM development timing, if it can deliver on performance, it still has a strong chance to catch up to its rivals.' SK, meanwhile, is prioritizing stable yields by using the same 1b, the fifth generation of the 10nm process and mass reflow-molded underfill packaging method from HBM3E. It is also deepening collaboration with Taiwan's TSMC to enhance both HBM4 production and advanced packaging capabilities. 'We are accelerating open collaboration with global customers as well as TSMC, not only to develop the highest-performance HBM4 but to reinforce our position as a total AI memory provider,' said Kim Joo-sun, SK hynix president in charge of AI infrastructure.
The Sun
08-07-2025
- Business
- The Sun
Samsung flags Q2 profit slump on US chip curbs
SEOUL: Samsung Electronics yesterday projected a far worse than expected 56% plunge in second-quarter operating profit due to weak AI chip sales, deepening investor concerns over the tech giant's ability to revive its struggling semiconductor business. The world's biggest memory chipmaker blamed the profit miss on US restrictions on advanced AI chips for China, but analysts said the decline was also due to delays in supplying high-bandwidth memory (HBM) chips to key US customer Nvidia . In March, Samsung flagged meaningful progress on its latest HBM 3E 12-layer chips could come as early as June. But yesterday it gave no update on supply to Nvidia, only saying its improved HBM products were undergoing customer evaluation and proceeding with shipments. Key rivals SK Hynix and Micron have benefited from robust demand for memory chips driven by AI growth in the US, while Samsung relies more on China, where sales of advanced chips are restricted by the US and competition with local rivals is growing. 'For Samsung Electronics, the key issue remains regaining competitiveness – everything ultimately comes back to HBM,' said Ryu Young-ho, a senior analyst at NH Investment & Securities. Potential US tariffs also cloud the outlook for Samsung's mainstay chip and phone businesses, pressuring margins. 'It will also be difficult to raise prices immediately due to competition, making it challenging to sustain high margins,' Ryu said. Samsung estimated an operating profit of 4.6 trillion won for the April-June period, versus a 6.2 trillion won LSEG SmartEstimate. That would be its weakest in six quarters, down from 10.4 trillion won in the same period a year earlier and 6.7 trillion won in the preceding quarter. Revenue would likely fall 0.1% to 74 trillion won from a year earlier, the filing showed. Samsung attributed chip profit falls partly to inventory value adjustments, without elaborating. Analysts said unsold HBM chips to Nvidia may have contributed to the large inventory writedowns. They estimated the chip division's operating profit could come in around 500 billion won, down over 90% from a year earlier, while its phone business profit may have improved during the period. Samsung Electronics shares slipped 0.2% against a 1.2% rise in the benchmark KOSPI as of 0341 GMT. It said it plans to buy back 3.9 trillion won (RM12 billion) worth of its shares, part of a 10 trillion won buyback announced last November. Analysts said they expect Samsung's profit to improve gradually, supported by the launch of new phones and growth in sales of HBM chips to non-Nvidia customers. – Reuters
Time of India
07-07-2025
- Business
- Time of India
Samsung Electronics Q2 profit likely to drop 39% on weak AI chip sales
Samsung Electronics is expected to forecast a 39% plunge in second-quarter operating profit on Tuesday, weighed down by delays in supplying advanced memory chips to artificial intelligence chip leader Nvidia . The world's biggest maker of memory chips is projected to report an April-June operating profit of 6.3 trillion won ($4.62 billion), its lowest income in six quarters, according to LSEG SmartEStimate. The prolonged weakness in its financial performance has deepened investor concerns over the South Korean tech giant's ability to catch up with smaller rivals in developing high-bandwidth memory (HBM) chips used in artificial intelligence data centres. Its key rivals, SK Hynix and Micron , have benefited from robust demand for memory chips needed for AI, but Samsung's gains have been subdued as it relies on the China market, where sales of advanced chips have been restricted by the U.S. Its efforts to get the latest version of its HBM chips to Nvidia certified by Nvidia are also moving slowly, analysts said. "HBM revenue likely remained flat in the second quarter, as China sales restrictions persist and Samsung has yet to begin supplying its HBM3E 12-high chips to Nvidia," said Ryu Young-ho, a senior analyst at NH Investment & Securities. He said Samsung's shipments of the new chip to Nvidia are unlikely to be significant this year. Samsung, which expected in March that meaningful progress over its HBM chip could come as early as June, declined to comment on whether its HBM 3E 12-layer chips had passed Nvidia's qualification process. The company, however, has started supplying the chip to AMD , the U.S. firm said in June. Samsung's smartphone sales are likely to remain solid, helped by demand for stock ahead of potential U.S. tariffs on imported smartphones, analysts said. Many of its key businesses including chips, smartphones and home appliances continue to face business uncertainty from various U.S. trade policies including President Donald Trump's proposal for a 25% tariff on non-US-made-smartphones and the July 9 deadline for "reciprocal" tariffs against many of its trading partners. The U.S. is also considering revoking authorisations granted to global chipmakers including Samsung, making it more difficult for them to receive U.S. technology at their plants in China. Shares in Samsung, the worst performing stock among major memory chipmakers this year, have climbed about 19% this year, underperforming a 27.3% rise in the benchmark KOSPI.
Business Recorder
07-07-2025
- Business
- Business Recorder
Samsung Elec Q2 profit likely to drop 39% on weak AI chip sales
SEOUL: Samsung Electronics is expected to forecast a 39% plunge in second-quarter operating profit on Tuesday, weighed down by delays in supplying advanced memory chips to artificial intelligence chip leader Nvidia. The world's biggest maker of memory chips is projected to report an April-June operating profit of 6.3 trillion won ($4.62 billion), its lowest income in six quarters, according to LSEG SmartEStimate. The prolonged weakness in its financial performance has deepened investor concerns over the South Korean tech giant's ability to catch up with smaller rivals in developing high-bandwidth memory (HBM) chips used in artificial intelligence data centres. Its key rivals, SK Hynix and Micron, have benefited from robust demand for memory chips needed for AI, but Samsung's gains have been subdued as it relies on the China market, where sales of advanced chips have been restricted by the US Its efforts to get the latest version of its HBM chips to Nvidia certified by Nvidia are also moving slowly, analysts said. 'HBM revenue likely remained flat in the second quarter, as China sales restrictions persist and Samsung has yet to begin supplying its HBM3E 12-high chips to Nvidia,' said Ryu Young-ho, a senior analyst at NH Investment & Securities. He said Samsung's shipments of the new chip to Nvidia are unlikely to be significant this year. Samsung, which expected in March that meaningful progress over its HBM chip could come as early as June, declined to comment on whether its HBM 3E 12-layer chips had passed Nvidia's qualification process. The company, however, has started supplying the chip to AMD, the US firm said in June. Samsung's smartphone sales are likely to remain solid, helped by demand for stock ahead of potential US tariffs on imported smartphones, analysts said. Many of its key businesses including chips, smartphones and home appliances continue to face business uncertainty from various US trade policies including President Donald Trump's proposal for a 25% tariff on non-US-made-smartphones and the July 9 deadline for 'reciprocal' tariffs against many of its trading partners. The US is also considering revoking authorisations granted to global chipmakers including Samsung, making it more difficult for them to receive US technology at their plants in China. Shares in Samsung, the worst performing stock among major memory chipmakers this year, have climbed about 19% this year, underperforming a 27.3% rise in the benchmark KOSPI. As of 0447 GMT on Monday, Samsung Electronics shares were trading down 1.9% against a 0.3% rise in the KOSPI.
