Samsung Electronics has been the world's No. 1 D-RAM vendor in terms of sales for 32 years since 1992. However, SK Hynix has already surpassed Samsung in terms of D-RAM operating profit since last year. This is because SK Hynix dominates the high-value-added D-RAM market such as HBM (high-bandwidth memory).
Samsung Electronics' DS (semiconductor) division posted sales of 23.14 trillion won and operating profit of 1.91 trillion won in the same period. Samsung Electronics was ahead in terms of sales, but SK hynix was ahead in terms of operating profit.
In particular, in the D-RAM segment, which has been Samsung's No. 1 semiconductor for 32 years, Samsung Electronics was still ahead in terms of sales, but SK Hynix was ahead in terms of operating profit.
SK Hynix has been leading Samsung Electronics in D-RAM operating profit since the first quarter of last year.
SK Hynix posted operating losses of KRW 1.025 trillion and KRW 68 billion in the first and second quarters of last year, respectively, in the D-RAM segment. However, it posted operating profit of KRW 560 billion in the third quarter, KRW 1.501 trillion in the fourth quarter, and KRW 2.637 trillion in the first quarter of this year.
It is expected that SK Hynix's D-ram sales will continue to outpace Samsung Electronics' DS division in the second quarter of this year.
Kim Kwang-jin, an analyst at Hanwha Investment & Securities, expects Samsung Electronics' DS division to record KRW 3.08 trillion in D-ram sales, while SK Hynix is expected to post KRW 4.0310 trillion in sales.
Kim Sun-woo, an analyst at Merits Securities, said of SK Hynix, "The company's strategy of differentiating high-value products such as HBM (high-bandwidth memory) overlaps with the AI-driven server trend, and its D-RAM sales price and profitability have been differentiated from competitors."
In particular, he noted that Nvidia, a major HBM customer, is delaying the adoption of its HBM3E (5th generation HBM) 12-stage product until the end of the year. With Samsung's HBM3E 12-speed product, which was touted as a strategic weapon to catch up, failing to deliver, he believes SK Hynix will effectively monopolize the HBM market this year.
In February, Samsung Electronics announced that it had successfully developed the industry's first HBM3E 12-speed product. While SK hynix was one step ahead with the HBM3E 8-speed, the company's strategy is to regain the lead with a 12-speed product with increased maximum capacity.
In the first quarter SK Hynix conference call in April, Kim Kyu-hyun, head of marketing at D-RAM, said, "When asked about plans to mass-produce 12-speed HBM3E, he said, "The HBM3E products that customers want this year are mainly 8-speed," indicating that there is not much demand for 12-speed products.
Meanwhile, there is also a possibility that Samsung Electronics, which still has an advantage in production capacity, will start to catch up with SK Hynix in earnest thanks to the improving D-RAM market and rising prices. This is because both D-RAM and NAND are expected to be in a supplier-dominated market.
Samsung Electronics has also started to expand its production capacity in preparation for this.
In April, Kim Jae-joon, vice president of strategic marketing at Samsung Electronics' memory division, said on a conference call, "We will shift production to server and storage, including high bandwidth memory (HBM), double data rate 5 (DDR5), and high capacity solid state drives (SSD)."
By Hong Yoonki (ahyk815@fntimes.com)
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