At 260,000 won Now, Another 300,000 Won to Go?... From Memory Prices and HBM to Dividends, Is It "Samsung's Time" Again [Click eJongmok]

Eugene Investment & Securities Maintains Target at 560,000 Won
Third-Quarter Operating Profit Projected at 112 Trillion Won
Shareholder Return Capacity Estimated at Mid-100 Trillion Won Range for This Year

On the 7th, Samsung Electronics achieved its highest-ever performance in the second quarter. According to Samsung Electronics' preliminary earnings report for the second quarter of this year, the company's total sales amounted to 171 trillion won, and operating profit was recorded at 8.94 trillion won. These figures represent increases of 29.31% and 810.26% respectively compared to the same period last year. Photo by Dongjoo Yoon, Samsung Electronics Seocho Building, Seocho-dong, Seocho-gu, Seoul, 2026.07.07

The investment thesis for Samsung Electronics is expanding in all directions. Several simultaneous changes have been cited, including the company's regained price leadership in memory, its narrowing gap in high bandwidth memory (HBM), improved foundry utilization rates, efforts to increase market share in smartphones, and the prospect of an upcoming shareholder return initiative.

Samsung Electronics Regains Memory Pricing Power

On August 19, Eugene Investment & Securities maintained its target price of 560,000 won for Samsung Electronics, along with a 'buy' recommendation. The stock closed at 268,500 won the previous day.

The biggest change is Samsung Electronics’ regained pricing power in the memory market. With demand centered on artificial intelligence (AI) servers remaining strong and even consumer device makers—such as smartphone OEMs—scrambling to secure supply, suppliers are now in a stronger position during price negotiations.

Eugene Investment & Securities predicted that in the third quarter of this year, both DRAM and NAND flash prices would rise by around 20% quarter-over-quarter. Even after accounting for negative foreign exchange impacts from the firmer won, Samsung Electronics' third quarter operating profit is projected to be 112 trillion won, a 25% increase from the previous quarter. The annual operating profit forecast is 382.1 trillion won.

This is not just about price hikes. Samsung Electronics is introducing a 'rolling' mechanism to long-term agreements (LTAs), under which the remaining contract period is extended each year. Under this structure, the company receives 20-30% of the contract value upfront and extends agreement durations in five-year increments. This not only reduces the possibility of customers terminating contracts but also enables Samsung Electronics to proactively identify future demand and adjust capital investments accordingly. It signals that the memory supercycle is shifting from being a temporary price spike to a stable cycle anchored in long-term contracts.

Is the HBM Chase Ending? Foundry Resumes Operations

Changes are also taking place in HBM, previously seen as a weakness for Samsung Electronics. Eugene Investment & Securities assessed that the yield rates for its HBM4 12-stack products are improving quickly, significantly narrowing the gap with competitors. As the 1c process stabilizes, improvements are seen not only in yields, but also in supply reliability and profitability.

It was also found that next-generation 1d process and wafer bonding-based production are advancing faster than at competitors. Accelerated process migration means greater output can be achieved on the same equipment. These advances are expected to benefit not only HBM, but also reduce costs and improve profitability for commodity DRAM. Eugene’s analyst, Injoon Son, commented, "Samsung Electronics is now regaining its leadership in the DRAM roadmap."

The foundry business also appears to be emerging from its trough. Production capacity for leading-edge 8 to 4-nanometer (nm) nodes is now mostly operational, and the customer base for 2nm chips is gradually increasing. The company’s differentiated ‘turnkey’ structure—offering memory, foundry, and packaging solutions in one—remains a unique competitive advantage for Samsung Electronics.

Galaxy Sacrifices Profits to Gain Market Share

On the 28th of last month, when Samsung Electronics began taking pre-orders for the Galaxy Z8 series, citizens in Gangnam, Seocho-gu, Seoul were exploring the new products such as the Galaxy Z Fold8 and Flip8. Photo by Yonhap News Agency

However, surging memory prices could put pressure on Samsung Electronics’ smartphone business. While the semiconductor division benefits from higher margins, the smartphone division faces increased costs due to rising component prices. Eugene Investment & Securities projects the operating profit of Samsung Electronics' MX business unit will plummet from 13 trillion won last year to 1.4 trillion won this year, and suggested there is even a chance of recording losses in some quarters.

Samsung Electronics is believed to have chosen to expand market share over short-term profitability. Backed by the popularity of new products like the Galaxy Z Fold8, the company is pursuing a strategy of boosting sales volume and building out the Galaxy ecosystem. The view is that, even if near-term profitability declines, increasing shipments and market dominance in the medium and long term will be more advantageous.

The Remaining Card: Shareholder Returns

Following its performance and technology rebound, shareholder returns are also likely to become a variable influencing the stock price. Eugene Investment & Securities estimated Samsung Electronics' shareholder return capacity for this year to be in the mid-100 trillion won range. However, this figure is not the company's official guidance, but rather the brokerage’s estimate of return capacity. Details on actual dividend amounts, share buybacks and cancellations, and their timing will depend on future policies yet to be announced.

Currently, Samsung Electronics is implementing its three-year shareholder return policy covering 2024 through 2026. Brokerage analysts believe that details of a new shareholder return plan may soon be unveiled. The report estimates this year's dividend per share (DPS) at 13,100 won with a dividend yield of 4.8%. Analyst Son added, "Price leadership, secured long-term demand visibility, memory process technology, expanding advanced foundry client base, and strategies to increase smartphone market share are now being combined with proactive shareholder returns. In every aspect, Samsung Electronics is broadening its industry leadership."

This content was produced with the assistance of AI translation services.