[Editorial] The Power of the Memory Boom: Time to Build the Next Growth Engine

Samsung Electronics has ushered in an era of quarterly operating profits of 100 trillion won for the first time in South Korean corporate history. The company disclosed on October 8 that it posted revenue of 195 trillion won and operating profit of 107.4 trillion won in the third quarter of this year. Operating profit rose 782.5% from the same period a year earlier. The current account surplus for January through August, announced the same day, reached $279.2 billion, four times the figure from a year earlier, while semiconductor exports in September exceeded $60 billion for the first time in a single month. The common factor behind these figures is the memory boom driven by artificial intelligence (AI). Semiconductors are lifting both corporate earnings and the country's external balance.

But behind the impressive numbers, there is another picture. For one thing, performance varies sharply across Samsung Electronics' business divisions. While memory led overall operating profit, the foundry and System LSI businesses within the Device Solutions (DS) division have yet to return to profitability, and the Device eXperience (DX) division, which handles smartphones and home appliances, also appears to be struggling. Rather than reflecting balanced growth across all its businesses, the company's structure depends overwhelmingly on the memory boom.

The Korean economy faces a similar situation. Rising memory prices have made a major contribution to the current account surplus and strong exports. But memory is an industry whose profitability can fluctuate sharply with supply and demand and shifts between technology generations. The fact that a sector that was posting losses just a few years ago is now underpinning corporate earnings and exports underscores the need to start preparing for the next cycle without delay.

What matters is where investment goes. Samsung Electronics should use its investment capacity not only to develop next-generation memory, but also to restore the competitiveness of its foundry business (contract semiconductor manufacturing), system semiconductors, and finished products. The government, too, should support semiconductor infrastructure while accelerating investment to develop the next engines of growth, including biotechnology, the defense industry, and secondary batteries.

Operating profit of 100 trillion won and a massive current account surplus are undoubtedly welcome milestones. At the same time, they starkly reveal how heavily South Korean companies and the economy depend on memory. The money earned and time gained now must be reinvested in next-generation technologies and industries to build another pillar of growth. Will today's two record-breaking figures simply mark a boom, or become an opportunity to transform the economy's foundations? They leave us with that question.

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