Samsung Electronics is set to release its earnings report for the second quarter of this year today (July 7).

Driven by the ongoing semiconductor super-cycle and a recovery in technological competitiveness, expectations are high that the company will once again break its all-time record, with quarterly operating profit potentially exceeding 90 trillion won.

This forecast accounts for employee performance bonus provisions; if these provisions are excluded, a record-breaking quarterly profit of 100 trillion won is considered possible.

Furthermore, by recording an operating profit in this quarter alone that is nearly double the total operating profit of last year (43.6011 trillion won), the company is expected to quell recent concerns regarding a potential peak-out in semiconductor demand—a scenario where growth slows after reaching a peak.

According to an analysis by Yonhap Infomax of earnings forecasts from securities reports over the past month, the market consensus for Samsung Electronics' second-quarter consolidated operating profit is 84.1605 trillion won, a 1,699.8% surge compared to the same period last year (4.6761 trillion won).

The consolidated revenue consensus for the second quarter is projected at 176.0234 trillion won, an increase of 136.06% from the same period last year (74.5663 trillion won).

If these forecasts hold true, Samsung Electronics will break its all-time record for the third consecutive quarter.

The operating profit for this single quarter is expected to be nearly double the total operating profit recorded for the entire previous year.

This level is also approximately 43% higher than the record-high annual operating profit of 58.89 trillion won achieved in 2018, during the previous super-cycle.

Notably, this performance reflects performance bonus provisions for employees accrued over the previous and current quarters, with the scale of these provisions estimated to be nearly 20 trillion won.

Consequently, some observers suggest that the second-quarter operating profit, excluding these provisions, could surpass 100 trillion won.

This is a milestone that has not been reached by other global big tech companies such as NVIDIA or Apple, with the exception of Saudi Aramco (which recorded 86.5 billion dollars, or approximately 132 trillion won, in the second quarter of 2022).

Samsung Electronics' revenue is also expected to reach the 170 trillion won mark in the second quarter, following the previous quarter (133.8734 trillion won) when it first exceeded 130 trillion won.

While the breakdown of earnings by business division will not be disclosed today, the Device Solutions (DS) division, which handles the semiconductor business, is believed to account for virtually all of the company's total operating profit.

This is due to the ongoing global investment in artificial intelligence (AI) infrastructure, which has left the excess demand for semiconductors unresolved.

As AI demand expands beyond High Bandwidth Memory (HBM) to general-purpose memory, and the AI market grows to include AI data centers and physical AI, forecasts consistently suggest that the upward trend in semiconductor prices will continue at least until next year.

In the case of Samsung Electronics, the company possesses the world's largest memory production capacity (CAPA), allowing it to benefit even more from the increase in demand.

Recently, the company has also strengthened its leadership in the high-value market by recovering its technological edge, such as becoming the first in the world to mass-produce and ship HBM4, the 6th generation of HBM.

Although some have recently raised concerns about a peak-out, suggesting that the growth of the semiconductor industry might soon slow down or enter a down-cycle, Samsung Electronics is continuing to secure long-term agreements (LTA) with big tech companies and is pursuing the expansion of its mid-to-long-term production capacity.

The annual operating profit consensus for Samsung Electronics by Yonhap Infomax has been on an upward trend, rising from 366 trillion won based on data from the last three months to 374 trillion won based on the last month.

On the other hand, the Device eXperience (DX) division, which handles finished products, is expected to underperform compared to the semiconductor business in the second quarter.

Following an operating profit of 3 trillion won in the first quarter, the DX division is expected to see even lower results this quarter due to the burden of rising costs for semiconductors and components.

Forecasts suggest that mobile operating profit will remain between 500 billion and 1 trillion won, while TV and home appliances are expected to see operating profits of less than 100 billion won.

Samsung Display is expected to post an operating profit of around 500 billion won, similar to the same period last year.

Harman, which handles the automotive electronics business, is also expected to remain at a similar level to the previous quarter, between 200 billion and 300 billion won.

(Photo: Yonhap News)