Samsung targets HBM4E mass production in 2027

South Korean chipmaker Samsung Electronics Co. expressed confidence in its advanced chip technology and production capacity after reporting record quarterly operating profit of more than 100 trillion won ($74.7 billion), the first such achievement by a global technology company.

During its third-quarter earnings call Thursday, Samsung Electronics highlighted growing market share in high-bandwidth memory (HBM). Revenue from HBM4 products more than tripled from the previous quarter, while its HBM market share reached a level comparable to its share of the overall DRAM market.

According to market research firm Counterpoint Research, Samsung Electronics held a 33 percent share of the global HBM market in the second quarter of this year, catching up with its industry rival SK hynix’s 50 percent, while its share of the global DRAM market stood at 38 percent.

“Our HBM4E has received positive evaluations since we became the first in the world to ship its samples in May,” said Kim Jae-june, executive vice president and head of memory strategic marketing at Samsung Electronics. “Our planned supply volume for 2027 has already been fully sold out, with prices negotiated at target levels, but we continue to receive requests from major customers for additional HBM supplies.”

Samsung Electronics said it plans to begin mass production of HBM4E in the first half of next year and expand production in the second half.

The company also said that it has already concluded long-term supply agreements (LATs) with 10 major customers and is conducting multiyear negotiations with another 10 customers as demand from companies seeking to secure substantial volumes of memory continues to grow.

This marks an increase from the five LTA customers Samsung cited in the previous quarter. Industry watchers expect Apple Inc. to be among potential partners.

Samsung Electronics also reported signs of a turnaround in its foundry and System LSI businesses, which have struggled with losses.

“The number of projects secured for our 2-nanometer process has more than doubled this year from a year earlier,” said Kang Suk-chae, executive vice president and head of foundry strategic marketing at the company. “High-performance computing (HPC) is expected to account for more than 50 percent of total foundry revenue next year.”

Kang also said that “cleanroom operations and equipment installation have begun at our Taylor fabrication plant in Texas, and we are reviewing plans to expand production capacity, including the construction of additional fabs.”

He explained that cooperation between the foundry and memory businesses had helped Samsung develop HBM4 with industry-leading performance.

“Despite being in the early stages of mass production, we have achieved an industry-leading yield rate for base dies,” Kang said.

The System LSI division also reported revenue growth, supported by new second-half models of system-on-chips (SoCs) and sensors. It is marking progress in customized SoC business through new partnerships and orders.

However, Samsung Electronics’ consumer-facing businesses continued to struggle under rising component costs and weaker demand.

Samsung Display said revenue and earnings from its small- and medium-sized display business increased from the previous quarter, supported by timely shipments of new products to major customers. It warned, however, that higher product prices could prolong market uncertainty and weaken demand in 2027.

The Device eXperience (DX) division, which manufactures finished products, remained under pressure. Its Mobile eXperience (MX) division posted revenue growth both on quarter and on year, supported by products including the Galaxy Z Fold8.

However, it recorded a quarterly operating loss of 600 billion won due to rising costs, including memory chip prices, even though the loss narrowed from the previous quarter as sales of premium products increased.

“The business environment has become increasingly challenging in the second half of the year as the low-end smartphone market contracts and competition intensifies,” said Daniel Araujo, a vice president at Samsung Electronics’ MX division. “In 2027, we will improve our profitability structure by focusing on top-tier models.”

The TV and home appliance businesses also continued to post losses, recording a combined operating loss of 200 billion won, wider than in the previous quarter.

In the home appliance business, earnings deteriorated due to rising raw material prices and logistics costs, despite strong sales supported by intensified domestic marketing and expansion of subscription services and business-to-business (B2B) operations.

Electronics device subsidiary Harman International Industries Inc., in the meantime, posted quarterly revenue of 4.3 trillion won, a sharp increase from a year earlier, and operating profit of 600 billion won.

Hwang Min-sung, research director at Counterpoint Research, noted that “Samsung Electronics’ MX division will prioritize improving its product mix by focusing on higher-priced models with stronger profit margins.”