Kiwoom Securities reaffirmed its "Buy" rating and target price of 350,000 won on Samsung Electronics (KOSPI: 005930) on the 23rd, while signalling that investors should shift their focus away from a recovery in standard memory chip prices and towards Samsung's ability to capture market share in high-bandwidth memory (HBM) and foundry services.
In a research note published the same day, Park Yu-ak, Kiwoom's semiconductor analyst, forecast Samsung's operating profit for the third quarter of 2026 (July–September) at approximately 107 trillion won, a rise of 19% quarter on quarter. That figure falls roughly 15 trillion won short of Kiwoom's own earlier estimate of 122 trillion won.
Two factors account for the shortfall. First, the won/dollar exchange rate has fallen more sharply than anticipated, reducing the value of dollar-denominated revenues when converted into won. Second, prices for standard DRAM chips are now expected to rise by only 12% quarter on quarter, down from an earlier forecast of 20%, as customer resistance to higher prices and weak consumer demand have combined to cap the rally.
By business division, the semiconductor (DS) segment is projected to generate operating profit of 10.73 trillion won, up 20% quarter on quarter, and will carry the group's overall performance. The mobile and network (MX/NW) division, which includes smartphones, is expected to record an operating loss of 1.7 trillion won, while the consumer electronics (VD/DA) segment is forecast to remain in the red by around 100 billion won. Samsung Display (SDC), by contrast, is expected to deliver a solid 1.1 trillion won in operating profit, up 51% on the previous quarter.
For the fourth quarter (October–December), Kiwoom projects operating profit of 11.1 trillion won, a modest increase of 4% quarter on quarter. Price gains for standard DRAM and NAND flash are expected to moderate to 3% and 12% respectively. HBM, however, should continue to grow, with the more advanced HBM4 generation accounting for more than half of shipments by volume. The foundry and System LSI division is also forecast to grow revenues as mass production of the Exynos 2800 processor gets under way.
These estimates sit somewhat below broader market consensus. According to data compiled by FnGuide, the consensus for third-quarter operating profit stands at approximately 10.65 trillion won, broadly in line with Kiwoom's figure. For the fourth quarter, however, Kiwoom's estimate of 11.1 trillion won is 6% below the consensus of 11.8 trillion won. On a full-year net profit basis, Kiwoom's forecast of 292.5 trillion won is 15% below the consensus of 343.5 trillion won.
For the full year 2026, Kiwoom projects revenues of 702.7 trillion won and operating profit of 364.9 trillion won — more than seven times Samsung's 2025 operating profit of 43.6 trillion won. The operating margin is forecast to leap from 13.1% in 2025 to 51.9% in 2026, driven by both surging memory chip prices and rapidly expanding HBM sales. The DS division alone is expected to achieve an operating margin of 71%.
The scale of this prospective turnaround is striking in historical context. Samsung's operating profit rose 398% in 2024 to 32.7 trillion won as the memory cycle turned. It then grew a further 33% to 43.6 trillion won in 2025. A leap to nearly 365 trillion won in 2026 would represent an extraordinary acceleration — though it rests on two critical assumptions: that Samsung secures a meaningful share of the HBM market, and that its foundry division approaches breakeven.
Investors, however, face material risks. Kiwoom's report explicitly flags the threat of intensifying competition from Chinese memory producers, notably CXMT and YMTC, which could exert downward pressure on standard memory prices. The pace of Chinese capacity expansion, if sustained, could cause supply-demand conditions to deteriorate more quickly than expected from 2027 onwards — a significant downside risk.
The foundry division's persistent losses are a further drag. Operating losses in the foundry and System LSI segment are projected at 777 billion won in the third quarter and 1.24 trillion won in the fourth, implying a full-year deficit of around 392.1 billion won. Although this represents an improvement on the 674.2 billion won loss in 2025, it underlines how much ground Samsung still has to recover before the division returns to profitability. The timeline for closing the gap with TSMC, the dominant contract chipmaker, remains uncertain.
On valuation, the current share price of 276,500 won (as of 22nd September) implies roughly 27% upside to Kiwoom's target. Samsung trades on a 2026 forward price-to-earnings multiple of 6.4 times, near the lower end of its historical range. As with any single broker's view, the analysis may be revised once actual results are reported.