Chipmakers poised to enter super-cycle as AI demand, DRAM shortages drive growth

Samsung Electronics office building in Seocho District, Seoul, Thursday / Yonhap

With both Samsung Electronics and SK hynix reporting record third-quarter earnings, Korea’s semiconductor sector is poised for a strong performance next year, potentially entering a super-cycle, analysts said Thursday.

According to financial data provider FnGuide, Samsung Electronics’ consensus estimates for next year — based on the average of brokerage forecasts — anticipate revenue of 367 trillion won ($257 billion) and operating profit of 63 trillion won.

SK hynix is expected to record 118 trillion won in revenue and 59 trillion won in operating profit, bringing the combined operating profit of the two companies to more than 120 trillion won.

Analysts expect the semiconductor market to enter a super-cycle in 2026, driven by factors such as expanding artificial intelligence (AI) and data center demand, rising high-bandwidth memory (HBM) requirements and robust dynamic random access memory (DRAM) prices.

The two Korean chipmakers are forecasted to surpass their previous earnings records in the coming year, a trend already reflected in their third-quarter performance.

Samsung Electronics reported third-quarter revenue of 86 trillion won, up 8.8 percent from the same period last year. Operating profit surged 32.5 percent to 12 trillion won, marking a return to the 10 trillion won level for the first time in about a year.

Its Device Solutions division, responsible for semiconductors, posted record quarterly memory sales with 33 trillion won in revenue and 7 trillion won in operating profit, a 19 percent increase from the previous quarter.

Samsung’s business outlook remains strong as it signed its largest-ever foundry deal — worth 23 trillion won — with Tesla, entered a chip supply agreement with Apple and is participating in OpenAI’s massive Stargate project.

SK hynix headquarters in Icheon, Gyeonggi Province, Wednesday / Yonhap

SK hynix also set a quarterly record, with third-quarter operating profit rising 61.9 percent year-on-year to 11 trillion won, while revenue increased 39.1 percent to 24 trillion won.

According to industry tracker Counterpoint Research, SK hynix maintained its leading position in the global DRAM market for the third consecutive quarter, capturing a 35 percent revenue share.

The company continues to hold a strong presence in the HBM market. In a conference call, SK hynix said its HBM products have been sold out since 2023, with prices remaining at profitable levels.

Shipments of its sixth-generation HBM, HBM4, which meets all customer performance requirements, are scheduled to begin in the fourth quarter following the completion of development and mass production setup.

Ryu Hyung-geun, an analyst at Daishin Securities, noted that concerns over potential DRAM shortages are prompting companies to secure memory chips in advance, creating strong demand and pushing semiconductor prices higher.

“As this FOMO (fear of missing out) effect strengthens in the memory market, the industry’s entry into a super-cycle is accelerating. Standard DRAM prices are expected to rise about 15 to 20 percent in the fourth quarter compared with the previous quarter,” Ryu said.

On Thursday, Samsung Electronics rose 3.58 percent to close at 104,100 won, while SK hynix gained 1.79 percent, ending at 568,000 won.

The KOSPI climbed 0.17 percent, or 6.82 points, to finish at 4,087.97.